Posts with tag: Only 38% of student landlords experienced rent arrears

Luxury Student Accommodation on the Rise, but can Anyone Afford It?

Published On: October 25, 2017 at 8:59 am


Categories: Property News

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Gone are the days of basic bedrooms, dodgy dorms and awful apartments. Nowadays, students can look forward to a new breed of luxury student accommodation – kitted out with flat-screen TVs, en-suite bathrooms, and access to communal cinemas and gyms – but can anyone afford it?

In the middle of a student accommodation crisis, it is being questioned whether students can really afford these new facilities.

Prices for luxury student accommodation in London can range from £170 per week for a standard twin (double bed, fitted wardrobes and en-suite) to £369 per week for an ultra studio (double bed, communal area and en-suite). These prices are equivalent to £680 and £1,476 a month respectively.

Luxury Student Accommodation on the Rise, but can Anyone Afford It?

Luxury Student Accommodation on the Rise, but can Anyone Afford It?

Whilst investment into student developments is on the rise, as property investors try to cash in on high demand from university students, it seems that some of the latest luxury student accommodation blocks are far out of reach.

Last year, over £4.5 billion worth of student accommodation (68,000+ beds) were traded between property investors – this is projected to increase to £5.3 billion by the end of 2017.

Student accommodation is considered low risk for investors, who are safe in the knowledge that there is a guaranteed income from students, as higher education is projected to grow by the end of the decade., however, believes that relying on private developers to tackle the accommodation crisis means that the new supply of beds will target the most affluent, rather than the majority of, students.

Danielle Cullen, the Managing Director of, says: “The emergence of luxury student accommodation isn’t serving the majority of students. Whilst there is demand for this type of luxury accommodation, and a handful of students are willing to pay the higher prices, the new wave of housing is just too expensive for most.

“Students aren’t asking for much when looking for somewhere to live. They just want somewhere with a decent sized bedroom, a double bed and good internet. They want affordable prices – they don’t need dishwashers, en-suite bedrooms or even onsite gyms. We need to see development of affordable student housing in populated areas, offering a good quality of living, close to universities.”

She continues: “Whilst the headlines in recent years have focused on the impact of £9,250 annual fees for degree courses, the cost of student accommodation has been soaring. This is thanks to a combination of factors; driven partly by universities, partly by developers and partly by students themselves.

“Plenty of universities, students and landlords are eager to point the finger at private developers when it comes to rising accommodation costs. When it comes down to it though, universities have allowed for the privatisation of accommodation. Universities have sold off old stock to investors, and have even invested the money themselves in less affordable accommodation, which has resulted in higher rental costs across the board.”

She concludes: “If we really want to attract people into higher education, we can’t turn student accommodation into a reserve for the wealthy.”

If you’re a student landlord, how are you responding to the accommodation crisis?

Students reliable…at paying bills

Surprising new research has indicated that students are the, ‘most reliable tenants’ for buy-to-let landlords.


The National Landlords Association (NLA) has found that buy-to-let investors who rent their property to students are most likely to receive rent on time, alongside gaining a large rental income.




Findings from the NLA survey show that students are the least likely of all tenant types to be late with their rental payments. Only 38% of student landlords experienced rent arrears during the last 12 months. This was in comparison to 59% of landlords lending to blue-collar workers and 71% lending to tenants in receipt of benefits.[1]


More encouraging statistics from the report show that student landlords experienced the lowest amount of void periods, with less than 30% having empty properties during the past 3 months.[1] This was substantially lower than 40% of landlords who rented their property to families and 49% who let to older partners.[1]




Results from the survey also suggest that students represent a profitable target audience for landlords. Student tenants offer a rental yield of around 6.7%, higher than the U.K average of 6.1%.[1]


Would-be student landlords are advised to do their research on the location of their prospective purchase. Generally, the better the University, the more lucrative the buy-to-let market in the area. For example, rental values in Cambridge city centre have risen by 4% over the past seven years.[1]

Students paying bills

Students reliable…at paying bills


Moreover, non-elite University cities are also proving to be lucrative buy-to-let regions. A study by showed that the average price of student house and flat share accommodation has increased by almost 22% in the past two years. Bath has seen a rise of 12.7%, with Bristol recording a growth of 7.7%.[1]




Chairman of the NLA Carolyn Uphill was buoyed by the results of the survey. She stated that it was, ‘encouraging to see such positive figures reported by landlords who let to students.’ She warns however that, ‘letting property to students, indeed letting to any tenant group, is not an easy win.’[1]


Uphill continued by saying, ‘as a student landlord myself, I know that it can be very hard work and requires the investment of time as many of your tenants are living away from home for the first time. It is this dedication to the relationship that makes letting to students so rewarding.’[1]


By way of advice, Uphill said that, ‘as with all tenancies, it’s important to establish a good, professional relationship from the start.’ She moved on to say that it is also, ‘essential,’ that landlords set out, ‘fair terms,’ in the tenancy agreement. This, Uphill believes, ensures that, ‘both landlord and tenant fully understand their obligations throughout the tenancy.’[1]