A survey revealed that more than half of students will study locally and live at home with their parents by 2020.
Only last week the nationwide tenant eviction and rent collection firm warned student landlords that the buy-to-let sector could be a potential casualty of tuition fee increases, fearing that many would-be students may be priced out of Higher Education.
Now their concerns have been confirmed by a survey from home insurer LV= which reveals that more than half of university students will choose a university local to them by 2020 and will live at home with their parents whilst studying.
This is worrying news for private landlords who in the past have seen student accommodation as a lucrative market. For a long time student accommodation has represented the best performing sector for landlords, with strong levels of demand, full occupancy levels and good prospects for rental growth.
However, a decline in student applications coupled with a surge in the number of undergraduates refusing to fly the nest could lead to a situation where there aren’t enough students to support the buy to let market in certain areas of the country and this will impact landlords’ income.
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 per cent in some university towns.
Graham Kinnear, Managing Director at Landlord Assist says:
“Whilst 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.”
Stephen Parry, Commercial Director at Landlord Assist adds:
“Many student properties could be made available for the standard private rented sector, however the yields on student properties do tend to be higher. We urge 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.”
