Nottingham has entered a new phase in its student accommodation market after years of rapid growth, with council officers warning that future decisions may need to focus less on building more student flats and more on whether the right type of accommodation is being provided.
A report due to be discussed by Nottingham City Council’s Homes, Economy and Infrastructure Scrutiny Committee on 15 June says the city’s purpose-built student accommodation market is maturing, with evidence of softening demand, rising vacancy rates and growing interest in alternative shared living models such as co-living.
The report does not propose an immediate policy change. Instead, it has been brought forward to allow councillors to scrutinise whether the council’s current approach remains appropriate and whether further work is needed.
Student housing has been a major planning and community issue in Nottingham for around two decades. Earlier growth in student numbers led to greater reliance on traditional housing and houses in multiple occupation, particularly in areas such as Lenton, Radford and Arboretum.
The council says this created concerns over concentrations of student households, the loss of family homes, pressure on waste services and parking, housing quality and the wider effect on established communities.
In response, the authority introduced an Article 4 Direction in 2012, requiring planning permission to convert traditional homes into small HMOs. Its Land and Planning Policies Document, adopted in 2020, also promoted purpose-built student accommodation in sustainable locations while bringing in tighter controls on HMOs, including a 10 per cent “significant concentration” threshold.
That approach has helped Nottingham become what the report describes as the largest purpose-built student accommodation market outside London. It says the policy has reduced pressure on traditional housing stock and helped stabilise student concentrations in some neighbourhoods.
However, the report says the issue facing the council has now changed. Rather than simply accommodating rising student numbers, the authority must consider market transition, quality, affordability, adaptability and whether some types of student accommodation are now being over-provided.
According to the March 2026 Student Accommodation Update Report, overall vacancy rates in purpose-built student accommodation have risen from below one per cent before 2023 to 12.7 per cent in 2025/26. Vacancy rates are highest in studio accommodation, which reached 16.1 per cent in 2025/26, as well as in larger privately operated city centre schemes and accommodation aimed at international postgraduate students.
Shared cluster accommodation is performing more strongly, with an 11.6 per cent vacancy rate. The report says cluster flats are typically 20 to 25 per cent cheaper than studios and are more likely to reflect the shared living arrangements many returning students want.
The number of full-time students requiring accommodation within Nottingham City Council’s area has also fallen, from 52,743 in 2022/23 to 41,314 in 2025/26. The report links this to several factors, including declining international postgraduate recruitment, changes to dependant visa rules from January 2024, wider cost-of-living pressures and a higher proportion of students commuting from home or living outside the city.
The proportion of students commuting or living outside Nottingham has risen from 17 per cent in 2016/17 to 23 per cent.
The report warns future demand remains uncertain and will be influenced by issues outside the direct control of the council or universities, including international recruitment, national immigration policy, affordability, flexible study arrangements, competition from other university cities and a projected fall in the number of 18-year-olds from around 2030.
Planning decisions are already beginning to reflect the changed market. The report refers to the refusal in 2025 of a large purpose-built student accommodation scheme made up entirely of studios, which the council said did not respond to identified demand in Nottingham. Both the University of Nottingham and Nottingham Trent University supported that position during the planning process.
The council says future applications are likely to be considered not only on the number of beds proposed, but also on the type, mix, affordability and long-term suitability of the accommodation.
The shift has had practical effects in local neighbourhoods. Council Tax Exemption data shows the number of on-street student households fell by 10.6 per cent between 2021 and 2025, which the report says is equivalent to around 728 properties returning to general housing use.
Officers say this supports long-standing aims to reduce pressure on family housing and rebalance areas with high student populations. It could also have financial implications for the council, as homes no longer occupied entirely by students become liable for council tax. The report says if the reductions seen since 2021 are sustained over five years, they could result in a cumulative increase in council tax income of around £5 million.
The report also says Nottingham’s higher level of dedicated student accommodation may be helping to moderate student rents. While average student accommodation rents nationally rose by around 4.4 per cent, average rents in Nottingham fell by around 2.9 per cent over the same period.
Some providers are responding to higher vacancy levels by holding or lowering rents, offering cashback, shorter tenancies and incentives such as free laundry, cleaning services or public transport passes. These incentives are said to be most evident in higher-priced and studio-led schemes.
However, the report also identifies risks. As some purpose-built student accommodation becomes harder to fill, there may be more proposals to repurpose or convert existing schemes for non-student use. Officers say some buildings may not be well suited to mainstream residential occupation, particularly if they were designed around small private rooms, limited storage or student-style communal arrangements.
This is one reason the council published draft informal planning guidance on co-living in March 2026. Co-living is described in the report as a model mainly aimed at working graduates and young professionals rather than students. While it can share similarities with student accommodation, the report says it involves different expectations around private space, amenity, storage and long-term occupation.
The guidance is intended to help the council assess future co-living proposals and manage any attempts to convert under-occupied or poorly performing student schemes. The report says co-living should not be used to bypass student accommodation policies or deliver substandard small residential units under another name.
The council’s approach has also involved work with both Nottingham universities. The report says the University of Nottingham and Nottingham Trent University provide enrolment and address data to help distinguish between headline student numbers and the number of students who actually need accommodation in the city. They have also commented on more than 40 planning applications, advising on student needs, affordability, unit mix and long-term suitability.
The report says this has helped steer some schemes towards more shared accommodation and away from a heavier reliance on studios.
There is also continuing work under the Nottingham Student Living Strategy, which runs from 2023 to 2028 and focuses on accommodation, neighbourliness and ensuring students are valued members of local communities.
A permanent Regulation 7 Direction restricting letting boards came into force on 30 March 2026 in nine areas with high student concentrations. The report says this followed long-standing concerns from residents about visual clutter, perceptions of transience and the cumulative impact of short-term property advertising in neighbourhoods with large student populations.
The scrutiny committee will be asked to consider the report as part of a wider discussion on the city’s student accommodation policy. No immediate decision on a policy change is proposed, but the report says the council’s future challenge is to manage the market more actively, ensure new accommodation matches demand, and make sure any buildings can be adapted if demand continues to soften.
