In the ongoing clash over the costs of living for students, and especially for tuition fees, there is one group whose concerns have not yet been considered – landlords of student tenants. The new academic year is about to start; it was recently reported that the number of students applying to university places dropped by 25,000 this year compared to last year. Part of the reason is believed to be the increase in tuition fees from £9k per year to £9,250 and the rise in interest rates from 4.6% to 6.1%.
The Findings and How they Impact Landlords
In years past, landlords of student tenants didn’t have much of a problem filling their vacancies. First year students typically began their search in earnest in January with most having secured a place for the second year before the Easter break. The last few remaining places would go over the summer –with students in clearing snapping up the rest. But the picture this year is very different.
Now, with the new academic year just a few weeks away, it seems some landlords of student tenants are still struggling to find students. Landlord representative groups place the blame at the government’s feet for this crisis facing students and landlords.
The Statistics
The report showed the following in each of the four countries of the United Kingdom:
- Universities in England had 437,860 applications from students. This was 5% lower than last year when the figure stood at 459,430
- Scotland’s institutions didn’t fare quite as badly. 48,940 applied to universities in the country, dropping 1% from 49,470 in the last academic year
- Welsh universities dropped to 22,530 from 23,740, a decrease of 4%
- Similarly, Northern Ireland applications dropped from 21,110 to 20,290, a drop of 4%
The Brexit vote had a massive impact on applications from EU students. Applicants from this demographic went down from 51,850 to 49,250, a drop of 5%. Fees and interest rates are clearly putting off domestic students, but since the June 2016 vote, the vital body of foreign students is taking a tumble.
Both situations are having an impact on the community of landlords who rent to student tenants.
The Long Term Effects
As the situation stands, the market has swung from an oversupply of students towards an oversupply of property. Many rooms and properties are likely to stand empty this year, with some places operating at lower than full capacity. Landlords with availability for this year may need to lower their prices to ensure their properties are rented at all.
If the government does not take steps to encourage more students to take up university places and put in place incentives to stem the drop in foreign students, it could mean that landlords will end up selling properties or renting in the general population. It could mean some go out of business and experienced people leave the industry altogether.