The number of students in the UK has risen dramatically in recent years, from 1.8 million in 1997 to 2.5 million in 2007.
As the government pursues its target of getting 50 per cent of 17-30 year olds into higher education by 2010 (it's currently about 40 per cent), these numbers will rise further.
This guide from Prime location outlines the pros and cons of letting to students and the main points to consider if you're interested in joining in.
The state of the market
The growth of student numbers has partly been due to government initiatives encouraging more young people to study, but also to more foreign students coming to the UK. Participation of foreign students at UK universities has risen by 67 per cent in the past ten years. This trend is expected to continue, with foreign student numbers rising from 15 per cent of all students in 2008 to 21 per cent in 2018.
At the moment, there are around:
495,000 student beds in halls of residence
680,000 full time students in Houses of Multiple Occupation (HMOs)
259,000 full time students living at home with their parents
Both the number of students living at home and those living in HMOs has risen sharply in recent years, since the amount of purpose built student accommodation has not kept pace with the rise in student numbers.
This leaves a gap for private landlords to fill.
Advantages and disadvantages
On the plus side:
Student accommodation need not be state-of-the-art. Older properties with multiple rooms are ideal.
Yields can be high, since there may be a more tenants in a student let than usual (students don't mind using a living room as a bedroom).
It is generally easy to find student tenants, particularly in Sheffield, with an abundance of Students attending both the University of Sheffield and the cities Hallam University. There is an excess of demand over supply, so rents are expected to continue rising in the coming years. Between 2003 and 2007 rents rose by 17 per cent.
By the nature of students, they will move on, so you are not committed to long-term contracts.
On the down side:
The rise of purpose built private student accommodation, to subsidise university halls, is gradually reducing the demand for private lettings. However, in Sheffield the amount of students from two large universities ensures a steady supply of property hungry students.
Maintenance bills will probably be higher than average, but then you don't need to provide top-end furniture and décor in the first place.
Students generally can't provide credit references.
You may have a gap during summer vacations with no tenants.
At the extreme, if your student tenants are noisy and disruptive, you could face penalties from your local council, responsible for leaving the property as they found it, or paying for repairs and redecoration.
As Sheffields leading lettings agency since 2006, Belvoir! Sheffield can help and advise you on purchasing a student property in Sheffield, right from before you have actually bought the property. Our specialist service for landlords covers the entire process, from purchase through to management and marketing.
Belvoir! Sheffield is the one stop specialist for Sales and Residential Lettings and Property Management, Investment and Wealth Management Advice, Fit-outs and Renovations, Property Insurances and Mortgages. Belvoir! Sheffield was the winner of the Belvoir Franchise of the Year Award for 2013 and is a multi award winning agency.
For more information, please visit Belvoir! Sheffield or call 0114 331 0033. Alternatively, please email firstname.lastname@example.org
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