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Landlords Who Specialise In Student Accommodation Hit By Tuition Fee Hike

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The lucrative student landlord market could be halved by the year 2010 if the findings of a new survey are to be believed.

The survey by home insurer LV= found that the increasing costs of tuition fees will force half of those going to university or further education to study and live at home with their parents in the future.

The findings have led Landlord Assist to urge student landlords to carefully consider how impending hikes in university tuition fees will impact their business plans.

These future plans will be affected by the government’s decision to raise tuition fees by 2012, allowing English universities to charge as much as £9,000 for certain courses.

The higher costs could see a decline in student applications and lead to a situation where there aren’t enough students to support the buy to let market in certain areas of the country which in turn will impact landlords’ income.

The student accommodation market is one of the best performing sectors for buy to let landlords, with strong levels of demand, full occupancy levels and good prospects for rental growth.

Experts predict that property values in university towns will fall and this will force a downward pressure on rents too.

Areas highlighted in the survey include Swansea, Portsmouth, Stoke, Sheffield and Nottingham, with student populations forecasted to decline by 40 percent in some university towns.

Graham Kinnear, MD at Landlord Assist said: “While the majority of students have historically moved away from home to study we wonder whether this practice will continue in light of tuition fee increases.

“If this survey proves to be accurate the student population in major university towns could plummet, leading to a catastrophic decline in demand for student housing. A number of our clients rely on student lettings for their income and this is clearly a concern for them.”

Landlord Assist recognises that some landlords could turn to the standard private rented sector if there is a slump in demand from the student sector, however yields on student properties tend to be higher.

The company therefore urges student landlords to be aware of changing market conditions and to regularly review their business strategies in order that they do not get caught with a glut of unwanted properties.

Stephen Parry, the commercial director at Landlord Assist added: “If the number of students diminishes significantly in some university towns there would be a real glut of property available on the rental market. This would reduce the rents achievable and put more financial pressure on landlords.”

“Many landlords that rent to students have purchased properties using buy you let mortgages, and an exodus of students may lead to many landlords falling into arrears with their lenders if they are unable to find suitable tenants.”

Jonathan Moore, director of the student accommodation website, HomesForSudents.co.uk said: “Tenants are being squeezed in a vice-like grip by rising rents across the private rental sector, but the situation is even more acute for students.

“For prospective undergraduates, despite being lower than the wider market, rental costs are soaring and will be an additional financial burden to bear on top of the £17,000 extra a new undergraduate must fork out in tuition fees over the course of their degree.

“With accommodation costs rising higher than inflation, it’s not just hiked fees that will take students years to pay off after university. As things stand, these loan repayments will come at a time they are facing record rents in the wider private rental sector.”

Oh well. They can always visit the Singing Pig and MSE forums for belly rubs.

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Landlord Assist recognises that some landlords could turn to the standard private rented sector if there is a slump in demand from the student sector, however yields on student properties tend to be higher.

Hmmmm . . .

And 'Landlord Assist'. Is that a registered charity?

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double whammy - the under 35s are seeing significantly reduced housing benefits from jan 2012 as it is reduced from a flat to a room in a share

where's Time to Raise the Rents when you need him?

or should his real name be Time to Hand the Keys Back ??

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double whammy - the under 35s are seeing significantly reduced housing benefits from jan 2012 as it is reduced from a flat to a room in a share

where's Time to Raise the Rents when you need him?

or should his real name be Time to Hand the Keys Back ??

God I had forgotten him. Used to be some real hum dinger threads when he got going... :lol:

Bath has two Uni's and is full of students in term time. If things do get bad number of students falling as well as fewer tourists and I suspect prices could get hit badly.

O yeah and the other bigger employer in the city - civil service. Oops

Edited by FTBagain

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double whammy - the under 35s are seeing significantly reduced housing benefits from jan 2012 as it is reduced from a flat to a room in a share

where's Time to Raise the Rents when you need him?

or should his real name be Time to Hand the Keys Back ??

...blast from the past.....I wonder if he is still extending his BTL properties into the loft and into the loft above that....making the three bed into the five bed....bed sit. ;)

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God I had forgotten him. Used to be some real hum dinger threads when he got going... :lol:

Bath has two Uni's and is full of students in term time. If things do get bad number of students falling as well as fewer tourists and I suspect prices could get hit badly.

O yeah and the other bigger employer in the city - civil service. Oops

I'm sure owner occupiers in student area's are rejoicing. Less partying students with the smell of spliff wafting around on warm evenings.

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I'm sure owner occupiers in student area's are rejoicing. Less partying students with the smell of spliff wafting around on warm evenings.

I'll take the smell of spliff over the reek of the poor white trash and immigrant nobody's that will fill these flats instead.

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I'm sure owner occupiers in student area's are rejoicing. Less partying students with the smell of spliff wafting around on warm evenings.

.. trying to sell a home near where rowdy students live is not exactly a buying signal for a prospective buyer that likes their peace and quiet...... ;)

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I understand more and more university's are getting in on the student rental market. This is one of Leicester's offerings - 2 minutes walk to the campus, free broadband, with a subway food outlet on the way out the front door.

Not much hope for a slum landlord trying to rent out a damp box-room when these modern digs are on the market.

google streetview

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Oh dear me, some other nasty slimeballs came along to felch all the money off the hapless young people, taking the orpportunity away from another class of paracite. I dropped my tiny violin on the floor and now can't find it in the carpet unfortunately.

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Oh dear me, some other nasty slimeballs came along to felch all the money off the hapless young people, taking the orpportunity away from another class of paracite. I dropped my tiny violin on the floor and now can't find it in the carpet unfortunately.

....maybe the fleas are playing it. ;)

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I’m as bearish as the next person on here but this article doesn’t make sense to me.

They’re saying “Tenants are being squeezed in a vice-like grip by rising rents across the private rental sector, but the situation is even more acute for students. “ and “for undergraduates rental costs are soaring”.

But they go on to say that BTL landlords are going to have a hard time because of fewer students living away from home.

Surely if there’s that much excess demand for rental property it will just mean that BTL landlords can expect to receive slightly less rental income than they would have done had tuition fees not been raised?

In any case I’m not convinced that the rise in tuition fees is going to have the negative impact on undergraduate applications (or students living away from home) that some people are expecting.

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I’m as bearish as the next person on here but this article doesn’t make sense to me.

They’re saying “Tenants are being squeezed in a vice-like grip by rising rents across the private rental sector, but the situation is even more acute for students. “ and “for undergraduates rental costs are soaring”.

But they go on to say that BTL landlords are going to have a hard time because of fewer students living away from home.

Surely if there’s that much excess demand for rental property it will just mean that BTL landlords can expect to receive slightly less rental income than they would have done had tuition fees not been raised?

In any case I’m not convinced that the rise in tuition fees is going to have the negative impact on undergraduate applications (or students living away from home) that some people are expecting.

What about the potential £40,000 debt student debt load and graduate tax makes you think it will have a positive or neutral effect on the rental market?

I don't forsee the job market picking up here, because outside of banks and the government, there is feck all work for a young person these days.

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double whammy - the under 35s are seeing significantly reduced housing benefits from jan 2012 as it is reduced from a flat to a room in a share

where's Time to Raise the Rents when you need him?

or should his real name be Time to Hand the Keys Back ??

They'll convert the areas in dumps, change a one bedroom flat a 2 room flat ie convert the sitting room into a bedroom easy done, change the max rent they can get for a room.

Welcome back to the victorian age of living where you go to work and come back to a room. This will do nothing to lower rents or the cost to local councils, they are just penalising the working living rather than doing something positive about house building ie social housing.

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They'll convert the areas in dumps, change a one bedroom flat a 2 room flat ie convert the sitting room into a bedroom easy done, change the max rent they can get for a room.

Welcome back to the victorian age of living where you go to work and come back to a room. This will do nothing to lower rents or the cost to local councils, they are just penalising the working living rather than doing something positive about house building ie social housing.

Your thesis doesn't consider that Victorian era heralded the industrial revolution, where everybody was drafted in to work, where housing shortages were common near the factory towns.

What grand scale make work, albeit low paying scheme do you think will re-float the students bank debt drink budget coffers?

We are never going back to the way it was, be it 1990's or 1890's, when people can come to terms with that, then maybe we can move forward.

These student flats are going to become slums. Plain and simple, that is unless Britain turns the migrant influx knob to 11, and keeps it there.

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They'll convert the areas in dumps, change a one bedroom flat a 2 room flat ie convert the sitting room into a bedroom easy done, change the max rent they can get for a room.

Welcome back to the victorian age of living where you go to work and come back to a room. This will do nothing to lower rents or the cost to local councils, they are just penalising the working living rather than doing something positive about house building ie social housing.

Researching my family background that is exactly how my great grandfather lived as an assistant schoolmaster in Yorkshire until around his mid 30's. Living in a lodging house, even with his wife, with multiple households with children. If street view is anything to go by, not massive properties either (if the streets still survive).

Eventually got their own (tiny) terrace in Castleford on becoming a schoolmaster around the start of the 20th century. And I tracked his brother who was a music "tutor" living in lodgings in his 40's. Could be the era of independent living for the masses is coming to an end and may have been a brief interlude!

All seems to be reverting back to a Victorian existence. Who knows "topping and tailing" with members of your own family in bed might make a come back! There will be an elite few that own everything, the rest rent. They rich won't be Victorian mill owners and industrialists, but bankers and rentiers. Thats my "distopian" future for you. unsure.gif

Edited by Sir John Steed

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You've all been drinking too much today

The lucrative student landlord market could be halved by the year 2010 if the findings of a new survey are to be believed.

What time warp has this article appeared from?

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double whammy - the under 35s are seeing significantly reduced housing benefits from jan 2012 as it is reduced from a flat to a room in a share

where's Time to Raise the Rents when you need him?

or should his real name be Time to Hand the Keys Back ??

Apparently that has been brought forwardMy link The cynical side of me thinks, is this to bail out the BTL in uni towns/city`s as the one`s unable to get enough HB to cover the cost of a flat they will be looking for rooms in HMO`s

But on the whole off the country I would imagine it will have a big affect

Edit to add I thought it had been brought foward to sep from jan but it is jan from april :(

Edited by long time lurking

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What about the potential £40,000 debt student debt load and graduate tax makes you think it will have a positive or neutral effect on the rental market?

I don't forsee the job market picking up here, because outside of banks and the government, there is feck all work for a young person these days.

I’m sure it will have some impact but not the student BTL Armageddon mentioned in the article. Demand for university places is strong especially for the top universities; the increase in fees will have little or no impact on the Russell group / red brick universities. There may be cut backs in some of the post 1992 universities but nothing like as bad as the doom mongers are making out.

I agree that 40k for an undergraduate degree, from a lower tier university, represents poor value for money especially when all previous generations got them for free or less than half the price. Many students, of course, will have no hope of paying off that level of debt before they retire.

However, I don’t think that many 18 year olds or even their parents do a cost/benefit analysis of university education, especially when the debt is deferred until after graduation and even then all it amounts to is a graduate tax on all earnings above 20k. For many young people it’s expected that they will go to university and I don’t think that is going to change anytime soon despite the increase in fees. I graduated with 20k debt and I didn’t even think about how much I would be paying back each month until I got my first pay slip. I think this is especially true in a recession when, as you say, job prospects for young people are very limited. If you were 18 and it was a choice between being on the dole, or stacking shelves in Tesco, or having the time of your life at university for the next three years - what would you choose? Regardless of the debt I know what I would choose.

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  • 284 Brexit, House prices and Summer 2020

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      • down 5% +
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