Forget mouldy bathrooms, all-night parties and run-down student digs. There’s a market for renting high-end properties in prime locations to affluent students studying at London’s prestigious universities.
As a landlord, you may have steered clear of the student market in the past. But student accommodation is not what it was ten or twenty years ago. Today, the student housing market in London is exceptionally diverse. An increase in modern, purpose-built student accommodation means that students expect the same high quality from private rented accommodation, and there is also a growing niche market for luxury accommodation to serve affluent students choosing to study in the UK, particularly in London.
What does the student market look like?
The UK is one of the top countries of choice for students choosing to study abroad, especially at postgraduate level. In 2016-17, 19 per cent of all students in higher education were from outside the UK, rising to 53 per cent for full-time postgraduate courses.
Leading the way are the Chinese. Over the past ten years, the number of Chinese students choosing to study in the UK has almost tripled and now exceeds the number of students from all EU countries combined.
International students gravitate to London and as a result, London’s universities have some of the highest proportions of international students in the country. 42 percent of UCL admissions were international students and more than half of all students who enrolled at Imperial College last year were from outside the UK.
Studying in the UK is expensive, which means a lot of international students come from wealthy backgrounds and are happy to pay high rents to secure top-quality accommodation in a prime location.
Mature students are another potential market. More than half of the students at universities such as LSE and UCL are studying postgraduate courses. Most universities have limited provision for postgraduate accommodation and mature students are more likely to want a quieter experience than university halls.
Why rent to students?
When it comes to rent, students are reliable tenants, as they typically have their accommodation costs covered by student loans or have their parents as guarantors. International students will often pay for their accommodation six or twelve months in advance if they don’t have a UK-based guarantor, which means there’s no risk of late payments.
Students also tend to know what’s expected of them when it comes to agreeing contracts and letting to students is typically a quick, straightforward process. The market is consistent and reliable and has the added advantage that many tenancies are secured months ahead of time, reducing the likelihood of void periods.
And, despite what some landlords may think, students aren’t that likely to trash your property. For one thing, they’re money conscious and want their security deposit back. And lots of students don’t want a party house. International students often come to study in the UK with high expectations of academic success. They work hard and want a place to relax after a long day.
What properties are students looking for?
Many students start their property hunt around Easter with almost half of all students booking their accommodation over the summer months when competition for the best properties is fierce. Students have already started contacting Strutt & Parker’s student lettings service to enquire about properties in central London, particularly around Imperial College.
One, two or three-bed properties are most popular and are snapped up either by individual students or two students who wish to share. When it comes to location, properties in South Kensington, close to campus, are particularly in demand, but Chelsea and Fulham are also popular areas.
Furnished properties are sought after, but if a property is unfurnished, that’s not necessarily a deal breaker. We let an unfurnished flat to some students from the Middle East who bought furniture, which at the end of their stay was sold on to the next set of tenants.
What you need to consider when renting to students
Renting to students can be a lucrative option, but as with any tenants, you need to make sure you’ve got your paperwork in order. Here’s what you need to consider:
• Insurance: You’ll need to tell your insurance provider that you’re renting to students and you may need to change or upgrade your policy.
• HMO licence: If you rent a property with shared facilities to more than five people, you’ll need a licence from your local council.
• Furnishings: Properties may draw more interest from students if they’re furnished (including white goods).
• Council tax: Students don’t have to pay council tax, but they’ll need to get an exemption certificate. Make sure you can prove your property was occupied solely by students to avoid an unexpected bill at a later date.
For more information on letting to students, please get in touch.