A new survey from accommodation website, accomodationforstudents.com, has shown that new landlords are having the greatest success at letting to students.
The survey highlighted that 70% of landlords let all of their properties for the 2014/2015 academic year, with those who are relatively new to the market reporting greatest success at letting their entire portfolio 89% of relatively new property managers (with 1-3 years of experience) reported letting their entire portfolio, compared to 65% of those with 5-10 years of experience. Of those that have not let all of their properties yet, just under 50% have let over three-quarters of their portfolio.
With the number of students living in privately owned halls doubling since 2007 (according to Higher Education Statistics Agency), private landlords are having to learn to compete. Whilst some experienced student landlords are left redirecting rents to renovate their properties, those entering into the market more recently are benefitting from a greater understanding of student expectations and a desire to compete with what the rest of the market has to offer.
Consistent with the previous AFS survey in July 2014, 68% of respondents say, in their experience, it is better to let to students than non-students, with 87% believing that students make good tenants and 92% expressing their plans to continue renting to students. This is linked to a number of associated benefits: better rental yields (77%), fixed tenancy length (67%) and an annual market for new students (47%).
61% of respondents have increased rent across all or some of their portfolio, with the majority (93%) keeping this increase below 10%. There is also a correlation between rental increases and confidence in the market, with those who increased rents for the 2014/2015 letting year feeling up to three times more confident about the future. Market confidence is highest in London and Scotland and lowest in the North West and Yorkshire.
Landlord confidence in the student lettings market was also linked to whether properties are accredited or not. 59% of respondents stated some or all of their properties were accredited and as a result, were increasingly likely to report being considerably more confident about the market. However, perceived barriers to becoming accredited included it not being considered necessary for a successful let, the associated costs and administrative burden.
The level of respondents offering a bills inclusive package has risen to 60% (from 56%), although those offering this also report a lower success rate. It is possible landlords use this to improve competitiveness in saturated markets, although previous surveys carried out by AFS have suggested that students look favourably on bills-inclusive rental packages. The majority of landlords who do not offer this are deterred by the potential for over usage.
Managing Director of AFS, Simon Thompson, says “This is the second survey of this kind that we have carried out. By comparing the results, it is interesting to see what shapes landlords’ perspectives of the student lettings market. Previously it was reported that letting success correlated with experience, whereas in this instance, success has swung in favour of landlords who have entered the market in the last three years. New landlords typically come onto the market with renovated properties offering a high standard product that are attractive to students and let quickly.”