Our research quantifies the impacts of recent changes such as the expansion of the University, changes to the regulation of housing, and the HMO overprovision policy on the St Andrews housing market.

April 2024 Progress Report

https://vip.wp.st-andrews.ac.uk/files/2024/04/Housing_VIP_2023_24_S2_Progress_Report.pdf

Student towns feature high-turnover housing markets with unique characteristics, including a transient student population, seasonal migration, and the demand-side driver of university enrolment. In the student town of St Andrews, Scotland, recent increase in rent prices and studentification have prompted housing affordability concerns from students and resident groups alike, leading Fife Council to introduce a policy in 2019 aimed at restricting the growth of Houses in Multiple Occupation (HMO). HMOs are properties that are rented to three or more unrelated individuals, are required by law to be licensed by the local authority and, in the context of St Andrews, are primarily occupied by students. With the goal to explore how this 2019 HMO Overprovision Policy affects the housing market, the statutory register of licensed HMO properties in St Andrews is analysed, revealing a significant volatility of active licenses between 2020 and 2024, ranging from 547 to 1,059. Further, wanting to understand key supply-side factors influencing rent prices, a hedonic pricing regression on property characteristics is conducted. Using web-scraping to build a dataset covering the St Andrews rental market from 2012 to 2024, monthly rent per room is found to increase by £3.69 each year, after adjusting for inflation. Additionally, a demand-supply model of the town’s private rental market is calibrated. By assuming a 1.5% yearly increase of supply in the hypothetical case of no HMO Overprovision policy implementation, this counterfactual analysis deduces that 29% of the increase in average rent between the years 2019 and 2023 stems from the policy’s introduction as a supply shock, while 71% is attributed to demand factors such as the growing student population. Lastly, to investigate further demand-side factors that affect students’ rental decisions, two regressions are conducted on 716 responses collected by a housing survey conducted in March 2024. When examining the effect of fee status, funding source, and ethnicity on rent paid, it is observed that international fee-paying students pay £100.32 higher rent per month than UK fee-paying students, and family-funded students pay £27.64, £89.02, and £171.95 more than those who have student loans, fund themselves, or have accommodation scholarships, respectively. Ethnicity is found to have a statistically insignificant effect on rent paid. This progress report provides a transparent documentation of results produced on the analysis of the student town of St Andrews. This progress report describes the research progress of the Housing in St Andrews Vertically Integrated Project (VIP) during the Candlemas semester of 2023/24.

Keywords: Studentification, Houses in Multiple Occupation (HMO), HMO Overprovision Policy, Students, Student Housing

Links to progress reports:

Progress reports are compiled by students who have researched this topic and include methods used by each team to generate results, the results, any shortcomings, observations made, future plans and references. We understand and expect some of our results to change as methodologies evolve, new data arrive, errors are fixed.