September 2012 marked the start of the first academic year where students could pay anything up to £9,000 per year on tuition fees. As we head towards the New Year, when students would typically start looking for their second year accommodation
September 2012 marked the start of the first academic year where students could pay anything up to £9,000 per year on tuition fees. As we head towards the New Year, when students would typically start looking for their second year accommodation, Townends estate agents say there has been a noticeable impact on the student rental market and landlords will have to make changes if they want to avoid lengthy void periods.
Areas within which Townends operate, such as Guildford and Egham, not only command some of the highest student rent, but are home to the University of Surrey and the Royal Holloway, both of which are charging students the maximum £9000 fee. Caroline Kavanagh, Managing Director of Townends Lettings & Management comments “We have noticed a real drop in the number of students looking to secure accommodation for next year, but with fees nearly three times as much as previous years, it’s hardly surprising that those that can, are having to sacrifice the independence of sharing a student let and remain living at home with parents.”
The real impact of this will not hit student landlords until September 2013, as most will have secured tenants for this academic year back in January, which will see their properties tenanted until next summer. With demand lower than usual for next year, Caroline says landlords should be considering their options. “These are:-
1.) Set a timeframe by which you are prepared to market your property to students during the prime letting period in the New Year. If your property is still vacant consider other options for your property.
2.) Consider renovating the property to bring it up to the standard of a professional let which would give it wider appeal to the likes of families, young couples or professional sharers. The existing condition of student properties rarely entices the average tenant.
3.) Renovate the property to appeal to international students who are less affected by the increase in tuition fees and still prepared to pay premium rents as long as the property is of high specification and within close proximity to the university.
4.) Consider selling the property and using the money to purchase an alternative buy-to-let investment with greater appeal such as a modern, purpose built two bedroom apartment.”
Some landlords are reluctant to change their properties to ‘Professional lets’ because they don’t typically command as much rent as when the property is let to a group of student sharers. According to Townends, landlords need to look at the bigger picture. “A four bedroom property brought up to scratch with some renovation work and subsequently rented out for 6-12 months at a £1000pcm is far more profitable than a property which has previously let for £1400pcm, but now faces the possibility of remaining empty for an entire academic year” says Ms Kavanagh.
Unlike the rest of the private rented sector, student landlords have seasonal windows of opportunity to let their properties. Once students start the term, they are unlikely to move, so if landlords are concerned about securing tenants soon, they are advised to speak to an agent for advice on the best way to proceed.