They'll probably be advised to walk through Falmer village and to use the footbridge by The Swan if going to Sussex Uni or to walk along Village Way if going to Brighton Uni. The majority of undergrads don't have cars.
Think partly property prices are just so silly now that rents, even for a crappy HMO, are high so why not use the student loan money to rent somewhere not crappy.
The house that was Falmer station stationmaster's home got demolished and rebuilt as student accommodation owned by a specialist student rental company. Students are great tenants; there for 9 months a year, put up with small box rooms and crap quality kitchen/bathroom, move out after a year or...
Actually think the Unis would be pleased as means less student houses in town which have a real bad rep and students close to campus so less pressure on buses and trains. Both Unis have increased student numbers over the past 10 years and those students need more accommodation.
Would be a surprise if this does get approval but curious if the developers have a second set of plans for, say, 250 rooms up their sleeves ready to pull out as a "compromise".