Posts with tag: students

Where are UK renters most satisfied?

Published On: March 1, 2017 at 9:59 am


Categories: Landlord News

Tags: ,,,

A new survey has revealed whereabouts in the UK renters are most and least satisfied.

According to data from the report carried out by Intus Lettings, the North East of England is the best region for tenants. Here, 52% of the 2,000 tenants questioned said that they were happy with their landlord.

Capital Pains

On the other hand, Londoners were found to be least satisfied, with only 20% saying that they were satisfied.

The main tenant irritations were found to be the level of customer service given by landlords, time taken to respond to maintenance issues, availability, inspections and fees.

Some specific issues highlighted included a ‘lack of communication and ‘lack of competence’ when dealing with repairs.

Hope McKendrick, letting manager at Intus Lettings, said: ‘We’re always hearing about the best and happiest places to live in Britain in terms of wellbeing, job satisfaction and availability of good schools, but there’s little research about how happy our renters are and which are getting the best service from UK landlords.’[1]

Where are UK renters most satisfied?

Where are UK renters most satisfied?

‘The survey results give us a different perspective on where is the best and it appears that our Geordie neighbours are winning in this case!’ she continued.[1]

Concluding, McKendrick noted: ‘High fees and costs will clearly contribute to the dissatisfaction of renters in the capital. However, as the property market in London becomes more and more demanding and saturated, landlords may be overstretched and even less able to respond to tenant needs as well as other regions, adding to their frustrations.’[1]



The Buy for Uni Mortgages Turning Students into Landlords

Published On: February 28, 2017 at 11:21 am


Categories: Finance News

Tags: ,,,,

The last thing students graduating from university expect to have in this day and age is a mortgage – the student loan debt they have and difficulty in raising a deposit mean that most will have to wait years before they can get onto the property ladder. Unless, of course, they are homeowners already.

That’s where the new Buy for Uni mortgages come in. Lenders are now looking to students as customers for early mortgages, which effectively turn them into landlords.

The new Buy for Uni mortgage from the Loughborough Building Society promises up to 100% financing for a property purchase, as long as close relatives provide security. A similar product has been on offer through Bath Building Society for some years, although both have been met with caution from student representatives.

Under Loughborough Building Society’s deal, students who are over 18 and in higher education in England and Wales can acquire a loan for up to £300,000, as long as the property is within ten miles of where they study.

Supporting them must be members of their immediate family – parents, step-parents or grandparents – who can provide security in cash or equity in a property, such as the family home, if the loan is for more than 80% of the property’s value. Interest rates range from 4.54%-4.74%, depending on what security is provided and the term of the mortgage.

Gary Brebner, the Chief Executive of the building society, believes the mortgage is a gateway product to get on the property ladder. After the three or five-year term, when the student will have graduated, it is expected that the loan will change into a more traditional mortgage.

As it’s unlikely that a student’s income will cover the repayments, the student instead becomes a landlord, earning money from the spare rooms by renting them out.

Brebner explains: “What you want is that the rental income covers more than the commitment, so if there is a rise in interest rates, it will cover it. Or that the guarantor says: ‘Well, yes, if interest rates did go up, or there was a void in rent, I the guarantor will pay that rent instead.’”

He adds that there has been substantial interest in the offer, but no money has yet been lent.

In Bath, however, the model has been in operation for nine years. Bath Building Society reports that the loans now account for around 10% of it mortgage business.

Again, a guarantee is needed from parents to bring the loan-to-value (LTV) ratio down to 75%. This means that if a student wants to take out a 100% mortgage to buy a £200,000 property, the parent must provide a £50,000 charge.

Chief Executive Dick Jenkins says that, in most circumstances, the rental income goes “a long way towards” covering the repayments, working better in some towns than others.

“We do come across the occasional person who thinks that we are offering them an enormous amount of beer money, but we obviously disabuse them of that notion quickly,” he says. “Most people are pretty serious and switched on and tend to come from reasonably well-off families, because we do need to take a collateral charge over mum and dad’s property to make that product work, so there has to be some equity in the parents’ property.”

However, he admits: “In some senses, that defines you as approaching more middle-class households than working-class, but that does not mean it is not a valid product for a given segment of the population.”

Student representatives have moved to ensure that undergraduates are aware of what they are getting themselves into when signing up for the mortgages at a potentially very young age.

The Buy for Uni Mortgages Turning Students into Landlords

The Buy for Uni Mortgages Turning Students into Landlords

The Vice President for Welfare at the National Union of Students, Shelly Asquith, insists: “Students should be careful of offers that seem too good to be true. Buying a house will usually involve significant hidden costs for deposits, agents and surveyors, even if the monthly payments seem to compare well with rented properties.”

Jenkins acknowledges that the Buy for Uni mortgage is not for everyone and recognises the criticism: “This is not a product that is available to all, because not everybody has got the parental equity to put into the equation. But that is no reason not to help those who have. We do get a little bit of flak about whether it is an elitist product. I don’t think it is.

“But certainly it works best for students who are probably on long courses, who can get the best benefit out of it over a longer period.”

However, while students may not be famous for their devotion to personal finance, Jenkins says that default rates on loans are much lower than on standard mortgages.

“We have found that the student-parental bond – that understanding that the parents and students have – means that if there is a payment problem, we tend not to see it because it gets resolved before it gets to us,” he explains. “They sort it out between themselves. I can honestly say that, in nine years, we have never had a problem case.”

But are the Buy for Uni mortgages saddling students with heavy debt at too young an age?

Brebner further maintains that they are not for everyone: “When we meet someone, we want to be sure that they know what they are doing. It might be that their circumstances are not quite right. It might be their guarantor circumstances are not quite right.

“There are going to be a number of things which we will explore as part of this to make sure that anyone who takes this as an alternative to renting, or as an alternative to student accommodation, understands what they are getting into.”

He adds: “We are not encouraging people to take on debt that they don’t understand or they wouldn’t understand their responsibilities towards. We are quite a cautious lender.”

Two mortgage experts, however, have given their views on the Buy for Uni loans:

David Hollingworth, of London & Country Mortgages, says that, as the loans are niche products, the interest rates are higher than would normally be expected: “The rates are higher than would typically be available to a first time buyer, even where parental security is being used, such as the Barclays Family Springboard deal that offers a three-year fixed rate of 2.99% up to 100% LTV with no fee where 10% parental cash is locked down as additional security.

“Both lenders offer the product on variable rates, so there is less stability on offer, but, nonetheless, these deals could offer a very practical and smart solution to the right person.”

Alistair Hargreaves, the Executive Mortgage Protection Consultant at broker John Charcol, isn’t convinced that rental income will cover the stress tests: “If somebody doesn’t have any capital to go down on this and they have to put a charge against their property and someone is going to be at university for three or four years, I can see it making sense. I just think rents are not going to be enough to sustain it, so mum and dad are going to have to have a decent income to back it up.”

One benefit, however, is that the property will be in the child’s name, points out Hollingworth: “That avoids any potential Stamp Duty Land Tax surcharge on the purchase of additional property, assuming that the parent already owns their own home.”

Regardless, parents need to understand the impact of providing security, he emphasises: “If everything went horribly wrong – the property was repossessed and sold for less than the outstanding debt – the lender could claim the shortfall from the parental cash or equity.

“In addition, where the parent is using their property as the additional collateral, it could have an impact on any future borrowing against their own home. Where using cash as security, the funds will remain in the parental names, but will not be accessible while they remain as security.”

What do you think of the new Buy for Uni mortgages – are they a good idea?

Private Student Landlords Left Behind as Private Halls Investment Grows

Published On: February 24, 2017 at 9:55 am


Categories: Landlord News

Tags: ,,,,

Private student landlords are being left behind as investment in private halls of residence continues to soar, according to lettings portal

Private Student Landlords Left Behind as Private Halls Investment Grows

Private Student Landlords Left Behind as Private Halls Investment Grows

One of the UK’s largest student property developers has recently set out plans to invest more than £300m over the next three years to create an additional 7,500 student rooms across the UK.

This news follows shortly after the student property specialist revealed a strategy shake-up to target more towns and cities with high-performing universities.

This academic year, the group has opened five new properties, creating 3,000 beds, in addition to 4,800 in ongoing projects for 2017. In the next three years, a further 7,000 beds are set to be created in new private halls developments across the UK.

The Managing Director of StudentTenant, Danielle Cullen, warns: “We’re currently seeing a student rental crisis in many areas in the UK. As a growing imbalance between supply and demand develops, rental prices are increasing, making it a less affordable option to study away from home. The student rental market is desperate for investment and it’s great to see vast amounts of money being spent.”

With over 1.7m students in full-time education in the UK and almost 60% of those living away from home, demand for student housing is high.

As for supply, 53% (230,000 beds) of total purpose-built stock is university-owned, while 47% (200,000 beds) is privately owned by private hall investors and landlords. But as investment in private halls rises, there are growing concerns for private rental housing.

What is uncertain, though, is the impact that this will have on the residential shared housing market and private student landlords. In 2015, private halls only accounted fro 6% of the entire student property stock. In recent years and based on development plans, this is set to significantly increase.

Some cities have recently had new private halls of residence developed, causing a handful of private student landlords to be left with unlet properties at the end of the last academic year.

StudentTenant is worried that this trend of leaving private student landlords behind will stick.

Cullen continues: “Whilst investment into private halls is great for students and competition, it will have a huge impact on private landlords in the areas of investment. Traditionally, private halls were always the higher end of the market in terms of both quality and price. Now more developments are completing, however, creating more competition, the price points are lowering, leaving some private landlords in trouble.”

What Will Brexit Mean for the Student Lettings Market?

Published On: February 21, 2017 at 9:57 am


Categories: Landlord News

Tags: ,,,,

This month has brought the big news that MPs have overwhelmingly voted to allow Theresa May to trigger Brexit under Article 50. But what will the UK’s exit from the EU mean for the student lettings market?

With a 498-majority vote, the Prime Minister is now one step closer to reaching her goal of starting negotiations with Europe by the end of March 2017.

What Will Brexit Mean for the Student Lettings Market?

What Will Brexit Mean for the Student Lettings Market?

However, as Theresa May visits the House of Lords debate over Article 50, there are still plenty of questions surrounding the student lettings market; Will rents rise or fall? Will supply and demand change?

Although some experts predict a bright future for student landlords, others say the student lettings market is highly unpredictable and unstable. But it’s probably somewhere in between, believes student lettings portal

In the last academic year, 1.72m students studied an undergraduate degree at a UK university, of which 7.2% were from EU countries.

German students top the list, with a total of 13,425 studying at university level, closely followed by French and Italian students (12,525 and 12,135 respectively).

University College London attracted 4,185 EU students, the most in 2015/16. King’s College London came in second place, with 3,560 students, while the University of Edinburgh had 3,510 EU students.

But what will Brexit mean for EU students in the future? With immigration control central to the Brexit plans, it is looking likely that non-UK students may have to apply for a student visa or short-term study visa in order to study and live in the UK.

Danielle Cullen, the Managing Director of StudentTenant, explains how Brexit will affect the student lettings market: “Naturally, landlords are worried about the uncertainty surrounding the student lettings market as a direct impact of Brexit. It is becoming increasingly alarming that EU students will have to apply for a study visa; it’s another hoop to jump through before they get access to a British university education.

“We could see a fall in EU students in the UK following Brexit, which would have a significant impact on student landlords. Supply could well outgrow demand, putting pressure on landlords to find tenants and maximise the profitability of to let properties. We’ve seen plenty of experts predict a vast drop in demand for student letting as a result of potential EU immigration restrictions, but there is still time to change that.”

She adds: “Our Government must take steps to ensure Britain remains welcoming to international students, not just for the student rental market, but to ensure British universities are innovating with the brightest and best minds.”

Following the vote to trigger Article 50, Theresa May was quick to release the Government’s plans for leaving the EU, dubbed the Brexit White Paper. The official policy document outlines the key themes for negotiation with the EU, immigration, trade and sovereignty, all of which could have a huge impact on the student lettings market.

The Impact of Right to Rent Checks on International Students

The latest research from student lettings platform exposes the impact of the controversial Right to Rent checks on international students, as the Government tries to crack down on illegal migrants.

Introduced in February last year, the Right to Rent scheme was launched by the Government as part of a wider initiative to assist with combating illegal immigration.

All landlords and letting agents are now required to check that tenants are legally in the country before renting out a property, or face criminal sanctions.

The Impact of Right to Rent Checks on International Students

The Impact of Right to Rent Checks on International Students

Tenants, including international students, must prove that they are legally allowed to reside in England by providing their identification documents to landlords. Tenants that do not provide the documentation could face deportation.

As it has now been a full year since the Right to Rent scheme was introduced, StudentTenant has assessed whether it has been successful in combating illegal migration, or if it has become an avenue for landlords to discriminate against international students/tenants.

Government data regarding the Right to Rent checks found that, of the 7,806 calls made by landlords to the Home Office between July 2015 and June 2016, just 31 illegal migrants were deported – calling into question how effective the scheme really is.

Furthermore, the official Right to Rent report from the Home Office reads: “Landlords, agents and householders should not be acting in a discriminatory way provided they make all checks on prospective adult occupiers.”

Nevertheless, a damaging new report from the Joint Council for the Welfare of Immigrants suggests that the scheme is causing discrimination against Britons, particularly ethnic minorities.

In addition, StudentTenant found that an alarming 23% of landlords were less likely to consider international students, while 76% of student landlords would not consider a tenant if they could not provide documentation that proves they are legally allowed to rent the property instantly.

It is likely that, due to requirements from the Government to check the legitimacy of documentation, recording expiry dates of immigration status and the pressure of fines, landlords are less willing to take on the extra burden of international students, the agency believes.

12 months on from in the introduction of the checks, 47% of student landlords still feel that the scheme will not have a significant impact on filtering out illegal immigrants in England – the core reason it was set up. What’s even more worrying, StudentTenant points out, is that 17% of landlords are still unaware of the rules.

The Managing Director of StudentTenant, Danielle Cullen, says: “When the new Right to Rent regulations were introduced, there was uproar amongst the landlord community, because of the supposedly unfair burden placed on them in relation to enforcing immigration laws. I have to say that the apparent ineffective implementation of the regulations so far seems to have warranted that uproar, particularly given the adverse effects on the international community legally residing within the UK.

“The worst part must be the lack of resources to actually police the changes, represented by the very minimal number of fines and deportations. Instead of actually assisting with a problem which should essentially be managed by the Government, it has simply created divides and increased discrimination and access to housing for non-British tenants, which is just not acceptable.”

Have your attitudes towards letting to international students changed following the introduction of the checks?

Record Month for Student Lettings in January, Reports Agency

Published On: February 14, 2017 at 9:25 am


Categories: Property News

Tags: ,,,

Online student letting agency has reported a record month for student lettings in January.

Record Month for Student Lettings in January, Reports Agency

Record Month for Student Lettings in January, Reports Agency

The firm experienced strong growth in property uploads, viewings and bookings over the past month.

The latest data from StudentTenant shows that property searches on the student lettings site rose by a whopping 75% in January.

Property requests were five times the average in January, highlighting the trend of students booking properties almost nine months before they move in.

The record-breaking number of confirmed bookings and lettings followed a surge of demand, as students rushed to secure housing for the next academic year.

In addition to its record month for student lettings, StudentTenant saw an increase in traffic in the final quarter of 2016, as students rushed to find a home. The firm’s data indicates that property searches were up by 74% and landlord sign ups by 22% in November, as both parties prepared for the January rush.

Figures also suggest that students were twice as likely to sign up to StudentTenant in November and December, as they began their search for properties for the next academic year.

The Managing Director of the student lettings site, Danielle Cullen, says: “It’s been another brilliant month for us. We’re extremely happy with the performance of StudentTenant over the past year, especially in January, as our team has been working extremely hard to keep up with the surge in demand. Figures reveal that January is the busiest time of year for students searching for properties, so it’s extremely important for us to get landlords on our site before demand peaks.

“The trend to book property so early is a long-standing tradition in a lot of UK cities, which can be both positive and negative for students. Booking somewhere with a group of people so far in advance means a lot can change in terms of both relationships and financial stability, so we always encourage students to make an informed decision before they secure somewhere.”

She adds: “2016 was a fantastic year for us, and our record requests and bookings are yet more great news. Our continued growth in the UK is underpinned by a heavily growing market, which is very exciting to be a part of.”

Landlords, have you seen a surge in student lettings already this year? If not, you should be putting your properties on the market soon!