The ongoing pandemic is causing travel restrictions and broader health implications for universities. In fact, it’s predicted that the number of students heading to London this term will drop by as much as -24%.
That’s a loss of over £65m a month for the London student rental sector.
London lettings and estate agent, Benham and Reeves, has revealed the best boroughs for student rental demand, despite predictions of a rental market decline due to a lower level of students heading to the capital.
London’s higher education providers accommodate 16% of the UK’s university students each year, and as many as 32% of the capital’s students come from overseas.
The average London student pays £702 a month in rent, meaning those on a three-year course will pay out £8,424 a year, totalling more than £25,000 throughout their course.
This means the capital’s student body brings in nearly £271m to London’s rental market in rent each month, with international students accounting for £85.6m of it.
However, despite this prediction, many areas of London are still experiencing extremely high levels of demand for student accommodation, something that will be welcome news to student landlords across the capital.
According to the research by Benham and Reeves, the number of student-specific rental properties that have already been snapped up by students sits at 22% of all student-specific properties listed on the rental market.
In Merton, for example, this ratio is far higher, with 80% of all student accommodation already let agreed.
Bromley (75%), Bexley (61%), Barking and Dagenham (60%), Hounslow (53%), Harrow (53%) and Redbridge (50%) are also seeing high levels of current student demand for rental properties.
Even in more expensive markets such as Hammersmith and Fulham, Islington and Camden, student rental demand is sitting at 19% to 25%.
Marc von Grundherr, Director of Benham and Reeves, commented:
“There is currently an evident decline in the level of rental demand from students than we might otherwise expect at this time of year. This has, of course, been driven by a lower number of international students looking for properties due to the travel restrictions and other hurdles that the current pandemic has presented.
"However, while predictions of student rental market losses are rather eye-watering, to say the least, we don’t believe this will be an issue that plagues the market for long.
"Many current students are beginning their studies in a virtual capacity until such time they can make a move to London, and once they do, we should see a further influx of demand for suitable student lets.
"University is very much about the life experience you gain from actually moving to a new city or country. With London still offering some of the best standards of higher education you can find worldwide it’s unlikely students will refrain from this first-hand experience unless absolutely necessary.
"Like many areas of life this year, we may see a slow start to the university year. But as life develops to deal with COVID-19, greater degrees of normality will prevail, and this is no different in the rental market student or otherwise.
"The very promising signs are that currently, many boroughs are experiencing massive demand for student rental properties, and this bodes very well for the academic year ahead. Foreign student demand, in particular, can bring very favourable levels of rent for buy-to-let landlords. We regularly have students from China and other areas of Asia renting at well above the average in their chosen areas to ensure they secure the best property they can while studying.”