Is it time to look again at student lets?
The new academic year is about to start at universities around the country and according to a report in Letting Agent Today earlier this week, the student rental market is booming. Yields are up and with pressure growing on supply across the PRS as a whole, demand for student flats and houses is riding high.
The article quotes research from buy-to-let lender Paragon Bank which shows that student lets are currently out-performing other rentals. They are delivering a mean gross yield in England of 6.15 to 6.6%. It’s a sector that is mainly served by corporate student accommodation providers, especially in big towns and cities, with only 13% of the market accounted for by buy-to-let investors, but there is undoubtedly money to be made.
Many landlords prefer to steer clear. Students have a bad name for being unreliable, annoying the neighbours and leaving the properties they rent in a mess at the end of their tenancy. It’s not necessarily a reputation they deserve. And in a market where supply is already stretched, if landlords put in the time to do their homework: taking up references and checking guarantors, they are more likely to find suitable tenants.
So where should you be looking to buy? According to Paragon’s research, the highest yields are currently in Swansea where they have hit 9.54%, followed by Hull, Liverpool and Stoke which are all yielding between 8.21% and 8.26%. Preston, Stoke-on-Trent and Plymouth are also giving good returns with average yields between 7.6% and 8.1%. Landlords in Preston are earning on average more than £19,000 a year per property.
Paragon recommends potential investors look beyond the best-known university towns and cities because smaller locations are likely to have more of the traditional type of student accommodation, such as shared houses, while property values are likely to be lower and that can help generate better returns.
Sound advice. Certainly worth considering if you’re thinking of dipping your toe in the water but don’t forget that the days of letting sub-standard property to students are over. any property you let must be fully compliant with health and safety regulations and meet all the same requirements that any other group of tenants will expect.
Our automated rental platform PlanetRent can help you ensure any new tenancy runs smoothly. All tenant checks can be carried out quickly and easily, sign-up is straightforward, and repairs and maintenance contracts are logged and dealt with efficiently. It’s pay-as-you-go and makes your tenants’ rental journey easy and painless. So if you are thinking of renting to students, why not check it out today.
Author : Maryanne Bowring
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