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Drop in student applications to hit landlords?

This is the second successive year that student applications for university places have fallen, following an 8.7% drop in the total number of applicants for all courses in 2012.

Last year Landlord Assist warned student landlords that the buy-to-let sector could be a potential casualty of tuition fee increases, fearing that many would-be students may be priced out of Higher Education.

The slump is being blamed on rising tuition fees, with some universities now charging as much as £9,000 fees for some courses.

For a long time the student sector has been seen as the most resilient for buy to let landlords, with strong levels of demand, full occupancy levels and good prospects for rental growth.

But Graham Kinnear, Managing Director at Landlord Assist is concerned that a general tendency towards fewer student numbers will start to affect tenant demand in some student towns.

He says: “A continuing trend of reduced student numbers is worrying news for student landlords in university towns who, over the years, have been able to anticipate full occupancy levels for the academic year. If university applications continue to drop at the current rate this could ultimately lead to some landlords having empty properties on their hands or having to cope with falling rents in the coming years.”
Stephen Parry, Commercial Director at Landlord Assist adds: “We feel that the numbers applying to Higher Education may continue to fall as long as tuition fees are in place and the jobs market remains flat. Additionally, the creation of credible alternatives to university as a route to professional qualifications, such as apprenticeship schemes, will also lead to less people going into Higher Education.

“With the continuing trend for fewer university applications, student landlords need to consider their business strategy and perhaps reinvent themselves in the professional letting market or move over to HMO letting.”

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