UK universities could face a 25% drop of international students as a result of the government decision to end home student status for EU students in the UK. This means EU students will have to pay overseas university fees which range from 10k to 45k per year. If you compared that to the fees of universities in Netherlands and Germany, it is a no-brainer that EU students would prefer not to come to the UK based on cost and quality.
In terms of numbers, we are looking at about the loss of 120,000 students. Combine this with the effect of the Pandemic on student intakes, this could be tricky for student landlords and student letting market.
What this could mean for UK student rental market?
We have seen a big drop in demands when international students were not able to return to UK during the beginning of the pandemic last year. In London, there were about 10-15% drop off in rental demand mainly due to overseas students not returning.
We could be seeing similar features of supply-demand imbalance in coming years when the university intakes drop with over supply of both uni accommodation, private purpose-built students accommodation, and private student rental houses. Universities are already preparing for potential loss of students coming in by taking measures such as lowering entry requirements and ramping up the targeted marketing’s to particular demographic and regions amongst other measures.
A university accommodation confirmed that Chinese and Indian students make up the majority of oversea intakes and have booked 22% of all rooms booked last year. 50% of them being Hong Kong residents. Keep in mind that India is currently suffering from severe outbreaks and country is in lock-down.
How can we make sure that our student houses aren’t emptied?
There’s no surprised that competition will be tougher this year and hence preparation will be the key.
Flexible/Alternative entry requirements
Just like what universities are doing, agencies and landlords should be looking at more flexible and alternative entry requirements when it comes to oversea tenants. The usual problem oversea students face is the lack of UK guarantor. Lack of guarantor is not an indicator of how bad a tenant will be but it is all part of risk management. Some landlords will accept it at their discretion but for most they would want 6 months-12 months rent up front. Since we are not allowed to take deposits more than 5 weeks since June 2019, taking more deposit as security is out of the question. Alternatively, we could encourage the tenants to use private companies that offer guarantor services in the UK like UKGUARANTOR dot com. One other alternative that could put landlords at more ease is taking out the Rent Guarantee and legal expenses insurance (RGI) which would cover when tenants stop paying and eviction costs.
Upgrading your property to stand out
Upgrading your property does not always have to be an expensive process. Sometimes it can be done with a touch of fresh paint and putting some effort into interior decorations. Win Legacy Management can certainly help in managing the project and getting professional photos + virtual viewing + drone videgraphy done to enhance your chance with Gen Z tech driven students. White walls with boring old furniture may not cut it in this competitive market unless you are ready to drop the rents to attract tenants. A little bit of money spent will save your property from being emptied for months, especially when there are only two windows with student intake being in the summer mostly and some in January.
Proactive marketing tactics
If universities are targeting their marketing differently, so should you. Or at least you should be using an agent who is willing to use more creative approaches. We find success in doing direct marketing by establishing relationships with overseas student/university agents. Since day 1 students will be aware of the availability of your property.
Facebook (groups, ads, marketplace) is also a great platform in targeted marketing. For example, there are students’ groups for generic, oversea students base on country, subject of study/department, hobbies etc and the list goes on. You have to be a li
ttle bit more creative and put a little more effort in your approach.
Having links with your local university is definitely a great idea. Some universities would be happy to have your properties as on their university verified private rental portal, i.e Kingston University. We also like to have student ambassadors in each university department for marketing purpose each year.
You want to start the marketing as soon as possible and you want to be using this proactive approach on top of the traditional methods.
Having Plan B and Plan C : Think about letting to non-students
Your preferred tenants may be students but if it doesn’t work-out we best have plan B. Depending on the property itself and its location, some may also be suitable for professionals. Some may be suitable for single family lets, the rent you get may decrease.
Alternative you could also look at renting to housing associations, charities and council for social housing and supported living. We do work with HAs, charities and local councils on regular basis and we have established partnerships. This is also a great strategy as providing a roof over the heads of those who need the most can be fulfilling. At the same time, they provide certainty and are backed by the government.
I hope this is helpful and if you are worried about your property potentially not being let, feel free to get in touch with us. We will be happy to help.