The United Kingdom boasts some of the oldest and most prestigious universities across the globe—attracting a huge amount of both British and international students. As a result of the robust student population, the student let market has been resilient even during the recent recession. Yet, letting to students is not without risk and poses unique challenges that are not present with the average tenant. Therefore, as a landlord, it would be beneficial to educate yourself on the market, the advantages and risks—and to purchase student let insurance to ensure you are covered for those additional risks.
Advantages of Letting to Students
The student let market has displayed marked growth for the past four years—with an increase of 1.6 per cent for 2013 to 2014, according to real estate consulting firm Knight Frank. In addition to the reliable, steady growth, the market offers these four additional benefits for landlords who let to students:
- Student tenants tend to have lower expectations for provided appliances, furnishings or decor than their professional counterparts.
- As a part of their applications, you may require that student tenants have their parents or guardians act as the guarantors for their leases. In the event that the students cannot pay their rent for a particular month, their guarantors will be then obligated to make the payments.
- The potential profit yields can be higher than other housing lets due to competitive pricing when compared to university housing costs and the ability to include a greater number of tenants.
- With an excess demand for student housing, it should be relatively simple to find student tenants. Depending on what universities are nearby, you may be able to advertise on their student housing sites.
This list is not comprehensive—the advantages of letting to students are varied and numerous.
Risks of Letting to Students
Despite the dependable growth and the potential for high financial yields in the student let market, there are four marked risks for landlords.
- Generally, maintenance bills are higher than they are with professional tenants as students can be tougher on the appliances, decor and furnishings due to their recklessness, alcohol consumption and the short terms of their leases.
- It may be possible that there are stretches of time where you have no tenants due to holidays or a gap between academic years.
- There is a growing trend of universities providing purpose-built private student accommodations that would reduce the demand for private lettings.
- If your student tenants are particularly noisy, you could be penalised by your local council.
This list is also not comprehensive—there are other risks you may face as a landlord letting to students.
Letting to Students Can Prove to be Lucrative
The student let market should be buoyant and stable for years to come. If you are a landlord, are interested in letting one or more of your properties to students, and would like to learn more about either the market or student let insurance, contact BC Underwriting today at 01444 810 444.