Landlords currently renting to students, or investors thinking about doing so, might want to consider new research that shows how keen University students are to secure accommodation nearly a year in advance.
In a Which? survey, 27% of first-year students said they would be looking for somewhere to live for their second year by the end of November in their first academic term. It also found that 41% would have begun searching by the time they break up for the Christmas holidays. The research, carried out in March and April 2018, showed that just over half of the nearly 3,300 students in the survey had started their search by the end of January.
Big regional variations
Students are more likely to look early in the smaller university towns and cities. The North East, home to universities in Newcastle, Sunderland and Middlesbrough, was the area with the highest proportion – 31% – of first years looking by the end of November.
It’s a completely contrasting picture in London, where a wider choice of accommodation lies behind just 2% of first years looking ahead by the same point in the calendar.
The South West follows one percent behind the North East, and landlords may also want to mull over recent data from Yieldit which states that Plymouth’s average net yields of 7.24% in purpose-built student accommodation are the highest in the UK. Other data from Simple Landlords earlier in 2018 had Durham, Warwick and Manchester as the three places returning the highest yields from student accommodation.
Comments like “We started early because things seemed to be going fast,” and “…we were scared of missing out on the best places,” from two unnamed students in the West Midlands sum up the Which? findings neatly.
Which? - survey carried out by Youthsight in March/April 2018
With some graduates inclined to stay put where they studied once they start working, and with young professionals attracted to areas with strong student demand for facilities and lifestyle reasons, forward-thinking investors may want to consider entering such markets.
Some of the benefits of letting to students, according to the insurance company, aside from the potential for higher yields, include the strong levels of supply as student numbers increase, the decreased risk of arrears compared to other tenant types as students tend to secure financing before going to university, and the ease of marketing as students will sign up for a full academic year.