Earlier this year 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 the University and Colleges Admissions Service which revealed the number of applicants has fallen from 76,612 students at this stage for 2011 to 69,724 for 2012.
The slump, believed to be the highest ever fall in student applications, comes as tuition fees for students starting degrees in 2012 are due to treble to up to £9,000 a year.
The figures appear to complement a ComRes survey for BBC Inside Out which has revealed that one in 10 students studying for A-levels have been put off going to university because of the increase in tuition fees, while half of those polled would consider going to a local university to save money.
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 intending to go to a local university to save money could lead to a situation where there aren’t enough students to support the buy-to-let market in some university towns.
Graham Kinnear, Managing Director at Landlord Assist says:
“These figures do not surprise us. We’ve been urging landlords for a while to look at their portfolios and acknowledge the need, where it exists, to look away from a dwindling student market and start looking further afield for tenants.
“The commencement of the £9,000 tuition fees has only accelerated an existing issue facing student landlords in that the population of 18 year olds is declining and is expected to continue to do so for the next decade.”
Stephen Parry, Commercial Director at Landlord Assist says:
“Student rentals have historically been lucrative for landlords. However, a reduction in student numbers will result in additional void periods which will impact the landlord’s average annual return. Many landlords will simply have no choice but to rent their properties to non-students or they may have to consider leaving the market in its entirety.”
