University charges could hit landlords in pocket

But nationwide tenant eviction and rent collection firm Landlord Assist fears the buy-to-let sector could be a casualty of the policy because many would-be students could be priced out of Higher Education.

A decline in student applications could lead to a situation where there aren’t enough students to support the buy-to-let market in certain areas of the country and this will impact on landlords’ income.

At the same time the rise in tuition fees may make students more cash-aware than before, leading to greater competition for cheaper properties. Subsequently landlords will be under increasing pressure to reduce their rents to attract tenants.

Graham Kinnear, Managing Director at Landlord Assist, said: "It appears that the vast majority of universities, including former polytechnics, are proposing to charge the maximum in terms of tuition fees and this will have a disincentive effect for those considering entering Higher Education from 2012 onwards.

"Many of the properties in university towns specifically cater for the student market and landlords require a reasonable yield by way of rent return to allow for the maintenance and repair that is invariably required."

Stephen Parry, Commercial Director at Landlord Assist said: "If the number of students diminishes significantly in some university towns there would be a real glut of property available on the rental market. This would reduce the rents achievable and put more financial pressure on landlords.

"Many landlords that rent to students have purchased properties using buy-to-let mortgages, and an exodus of students may lead to many landlords falling into arrears with their lenders if they are unable to find suitable tenants."

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