Investors in student accommodation report high occupancy rates

New landlords favouring students over other tenants survey finds

Investors in student accommodation report high occupancy rates

A new survey by accommodationforstudents.com has shown that with regard to new landlords, letting to students is proving to be the most successful in terms of occupancy rates. Of those surveyed, 70 percent of landlords with 1-3 years’ experience let their entire portfolio to students for the academic year 2014/2015. This was higher than landlords of 5-10 years’ experience who reported that 65 percent of their portfolios were let to students.

Sixty eight percent of landlords surveyed felt that it was better to let to students with 87 percent believing that students make good tenants and the vast majority, 92 percent, planned to let to students in the future. Landlords reported that the reasons for them favouring students over other categories of tenant were mainly down to better rental yields from student let accommodation and fixed tenancy lengths.

The survey also indicated that landlord’s confidence in the student accommodation market was linked to accreditation of their property, such as the AFS Unipol Student Property Accreditation, which offers parents and students a template for assessing student accommodation standards. However some landlords expressed concern that costs in meeting accreditation standards were prohibitive.

An increasing number of landlords are offering bills inclusive rent deals for students as incentives, the survey found, though some landlords felt that such packages encourage over usages of utilities in some cases.

In commenting on the survey, Managing Director of AFS, Simon Thompson said,

“This is the second survey of this kind that we have carried out. By comparing the results, it is interesting to see what shapes landlords’ perspectives of the student lettings market. Previously it was reported that letting success correlated with experience, whereas in this instance, success has swung in favour of landlords who have entered the market in the last three years. New landlords typically come onto the market with renovated properties offering a high standard product that are attractive to students and let quickly.”

The high occupancy rates in student accommodation have led property investors to recognise its potential as an alternative real estate asset class. But with the value of student accommodation in the UK set to exceed £2 billion this year, there are signs that this category of residential property is now becoming a mainstream real estate market.

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