Letting to students can be a rewarding business, but it's important to be aware of the pitfalls as well as the opportunities. If you're a homeowner, landlord or prospective investor, read our helpful guide to letting a property to students.
The number of students in the UK has risen dramatically in recent years, from 1.8 million in 1997 to 2.5 million in 2007. As the government pursues its target of getting 50 per cent of 17-30 year olds into higher education by 2010 (it's currently about 40 per cent), these numbers will rise further.
This guide outlines the pros and cons of letting to students and the main points to consider if you're interested in joining in.
The growth of student numbers has partly been due to government initiatives encouraging more young people to study, but also to more foreign students coming to the UK. Participation of foreign students at UK universities has risen by 67 per cent in the past ten years. This trend is expected to continue, with foreign student numbers rising from 15 per cent of all students in 2008 to 21 per cent in 2018.
At the moment, there are around:
Both the number of students living at home and those living in HMOs has risen sharply in recent years, since the amount of purpose built student accommodation has not kept pace with the rise in student numbers.
This leaves a gap for private landlords to fill.
On the plus side:
On the down side:
Here are some steps you can take to minimise the risks of letting to students.
This is partly down to relative property prices across the country, but also due to the balance of supply and demand: the more students there are, and the less university accommodation there is, the higher the rent.
Here is a sample of average rents per week from around the UK and Ireland:
With property values going through a period of volatility, it is hard to say what yields these figures represent. You should compare the figures with property values in the area where you're considering buying (or have already bought). Then ask university accommodation offices about future student numbers and what provision there will be for them.
Most students are looking for the best value and the most convenience. If you can keep your price below that of most competing landlords, you will be in demand. Students are willing to compromise on many things in order to save money.
Their priorities are:
Overall, students are a reliable and worthwhile source of lettings income. They are a 'captive market', since they have a limited choice of where to live. They are generally tolerant, easygoing and undemanding tenants and there will be more of them every year.