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House Prices: New Threat For Buy-To-Let Landlords

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http://blogs.telegraph.co.uk/finance/ianmcowie/100010227/house-prices-new-threat-for-buy-to-let-landlords/

Thousands of buy to let landlords could find themselves among unexpected victims of rising tuition fees as more students decide to stay at home, causing a sharp drop in demand for flats in university towns.

A survey of more than 1,000 students found that just over half – or 52pc – said they would choose a local university to make ends meet after annual tuition fees rise to £9,000. Official figures suggest that at present only a fifth – or 21pc – of full time students currently live at home.

John O’Roarke, managing director of LV= home insurance, said: “Newcastle upon Tyne, Lincoln and Sheffield will see the greatest decline in student populations.

“Because these areas rely heavily on university populations to boost their local economies, they could become ghost towns as non-local students abandon them for cheaper study closer to home. The areas worst hit will be those with large student populations such as Jesmond and Moorside in Newcastle; Broomhill and Sharrow in Sheffield; and Boultham and Carholme in Lincoln.

“Other cities which will feel the impact of the student exodus include Swansea, Portsmouth, Stoke-on-Trent and Nottingham, with university student populations forecasted to decline by 40pc in these areas.”

You might wonder why LV= should care. The explanation is that the household insurer fears that after the student exodus begins when fees go up next year, the result will be an increase in criminal damage when many properties fall vacant or derelict.

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Or the locals might be able to afford the houses the btl brigade all bought!

which will destroy the local economy as the locals wont have the entrepreneurial flair that the BTL landlords bring to the economy

Edited by georgia o'keeffe

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I'm not entirely convinced. If this argument stands up, shouldn't the worst-affected cities be those with mickey-mouse universities? Russell-group unis should remain desirable, and so cities like Sheffield (and I believe Newcastle) seem unlikely to top the list over the likes of Plymouth.

OK, Sheffield has a big ex-poly too (cheekily calling itself "Sheffield Hallam", despite it being the older, Russell-Group uni that is actually in the Hallam end of the city). But the OP cites Broomhill, which is student heartland for the real uni.

Hmmm ....

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I suppose what could happen is that the Russell Group unis and other more popular ones start getting most of their applications from students already living within a reasonable commute.

One of the reasons for and benefits of university has always been that students could live away from home and, theoretically, become more mature and responsible young people as a result.

The btl landlords will definitely lose out even in the uni towns if a higher proportion of their potential market already lives there in mum and dad's house.

Efficient use of housing space, energy, food costs and transport - desperate times.

Just occured to me:

40 years ago - most young people stayed at home, got a job, eventually bought a house after saving a deposit (maybe got married etc)

20 + years ago - students left home, went to uni, got a job somewhere, bought a house and only reappeared at Christmas.

5-10 years ago - students left home, went to uni, came back home and got a job because they couldn't afford a house anywhere.

Now: the prospect is students don't leave home, they just go to university nearby

Next step: students don't leave home, don't go to uni (what's the point if you can't have a uni lifestyle or guaranteed job) - they just stay at home, get a job and build a life around that. And we can start the cycle again if the resulting decrease in btl brings house prices within reach of people doing this.

Y

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Hmmm. Interesting in light of new report from Knight Frank on student marekt - they argue (admittedly based on purpose-built blocks) that the market will be fine.

:lol:

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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