Student rents soar as expectations rise

Latest research has revealed that student rents have surged at a substantial rate during the last 20 years.

Benham & Reeves Residential Lettings data suggests that student rents have soared by 55.5% over the period, in comparison to 24% for non-student accommodation.

Student rental rise

The firm suggests that students are moving away from more traditional accommodation in favour of more luxurious flats and halls of residence. This is despite the hike in tuition fees over recent years.

Gone are the days when students settle for substandard properties, with many demanding well-kept, decorated dwellings with fast internet and en-suite bathrooms.

As part of its investigation, Benham and Reeves took a survey of its own offices and respective student properties and tenants. Over the 20 year period, the average monthly spend on rent has increased significantly. However, the average number of people sharing a property has dropped.

Expectations

Lettings Director at Benham & Reeves Residential Lettings, Marc von Grundherr, said, ‘part of the reason we see student’s expectations and therefore requirements changing is because of demographics. With the abolition of student grants and the introduction of tuition fees, many young people from lower income backgrounds have eschewed university degrees and gone straight into the workforce. Those who have sought university degrees tend to be more affluent while simultaneously, universities have topped up student numbers by welcoming greater numbers of overseas students.’[1]

‘These groups simply aren’t prepared to live in traditional ‘student houses’ with 5 rooms to one toilet and a very basic kitchen. They want to continue to live at the same standard they have at home. Private halls of residence have increased in popularity in response, many with rents approaching £400 per week. Unsurprisingly, many students are also turning to studio and one bedroom apartments that command a similar rental value.’[1]

Student rents soar as expectations rise

Clampdown

It is not just students becoming more refined that has led to an increase in expectation and rents. Increases in regulation enforced by councils, particularly a clampdown in houses in multiple occupation (HMO’s) means that larger properties normally shared by four or five people are becoming rarer.

A consequence of fewer people sharing a property is higher rents, alongside utilities and associated fees.

Another key factor is overseas property investment. Traditionally, overseas investors purchased property for their offspring while studying. Eventually, these properties were retained as rental investments.

Benham & Reeves Lettings found that 98.7% of their clients that did this found that when their children had left the UK at the conclusion of their studies, the increased property value covered the total cost of education.

Social change

Mr von Grundherr concluded by saying, ‘I think there is also greater social change, as well. Today’s students have grown up in an era of easy credit, cheap flights and mass luxury. The idea of slumming it is completely foreign to them. They would much rather go deeper into debt than shiver in an unheated house. Parents also have more concerns about their children’s safety and don’t want them living in a questionable part of town. The television series Fresh Meat may have only recently gone off the air but the premise of six students sharing a run-down Victorian house already seems dated

[1] http://www.propertyreporter.co.uk/landlords/student-rents-surge-as-luxury-digs-gain-popularity.html