September can only mean one thing – back to school. While the concerns of younger students include pencil cases and packed lunch boxes, undergraduates will be thinking about more serious matters, such as where to live.
Student lets are big business for landlords, even for institutional investors. The Financial Times recently reported on Blackstones – the world’s biggest commercial landlord – offloading offices and retail units so it could bid to buy student housing operator, GCP Student Living.
Even for the humble one-property landlord or investment novice, there are gains to be made in the student let market. A shortage in traditional ‘hall’ accommodation, coupled with the desire to live with like-minded undergraduates in a freer environment, has buoyed the private student rental market.
A recently published student living index found that growing demand was behind student rents increases of almost 20% over the last 12 months. Students in Leicester were most affected, with a £188 rise in their average monthly rental costs.
The ability to increase rents is important when it comes to yields and there is good news for those aiming for the university market. Analysis of 5,000 student lets between January and July 2021 found that yields were climbing steadily, with marked gains in the North East, the North West and the South East.
Investing in a town where there is a single university has also been proven to be a good strategy, with research revealing 7 out of the top 10 cities for the best student rental yields only had one main university. Swansea came out as the top location, with landlords enjoying student yields of +9.56%, followed by Hull (+8.68%) and Sheffield (+7.58%).
If your head has been turned by the attractive student let market, here’s some advice about appealing to undergraduates:-
If you’re hoping to run a house share, also known as an HMO (House in Multiple Occupation), you’ll need to check with the local authority about a license to operate and also familiarise yourself with the extra compliance required when renting to multiple households.
Students like fully furnished properties so they can move in with just the basics. Budget for buying furniture and ensure anything you purchase second hand, or are given meets fire safety regulations. When offering a fully furnished student let, an inventory will be especially important.
Don’t hesitate to ask for a parental guarantor or a whole year’s rent upfront. This is quite normal in the student let market, giving landlords a greater degree of financial security and less chance of arrears.
With many lectures remaining online, reliable and fast broadband is on the top of every students’ housing wish list. Installing the very best WiFi could be part of a ‘bills included’ package, should you choose to follow this path.
Think about the property’s location when looking to purchase a student buy-to-let. The holy trinity of places to be close to include the university campus, shopping facilities and any social centre – walking distance is preferred as students will not necessarily drive or own a car.
It’s never too early to market your student let. Competition for the best properties can be fierce and as a result, many students will look for a place to live in the autumn, ready for the following academic year.
We are well versed in helping landlords get ready for the student market. If you would like advice on compliance and HMOs, setting the rent, how to operate a ‘bills included’ let, working out yields, how to find tenants and managing a student let with the minimum of fuss, talk to us today.
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