The seemingly inexorable increase in investment directed at building projects designed for student accommodation has left some landlords in London battling to find tenants.
For many years property investors taking out landlord insurance for student lets were looked upon with a certain amount of disdain by many in the business but things started to gradually change and today professional landlords see students as a good investment. So much so that in 2009 investment in new homes aimed for student accommodation stood at £350 million, in the first three quarters of 2012 the figure is a mind boggling £2billion, with over half of that figure spent in London alone.
The attraction of student accommodation to landlords is high occupancy and a reliable income stream in times of recession. Unfortunately the last 12 months has seen another increase in university fees and more importantly for the London market, a curb in visa’s, which has drastically cut the number of foreign students needing accommodation. The result has seen some landlords in fear of being left with empty flats and it is students that are benefiting.
According to industry insiders property developers are offering students sweeteners such as free driving lessons, flat screen TVs or iPads in return for them signing up for a room. One student, Varala Maraj, confirmed a similar scheme was in operation in her block of flats, saying “There’s an empty room in my flat right now and there are empty flats in the building. They started an iPad promotion when they wanted to rent rooms and they still have rooms available. I wasn’t given one because I applied before the promotion.”
British-based student development specialists, Mansion Group, are aware of the situation and have offered four weeks free rent in some its properties, it is also offering 12 free driving lessons and is accepting less financially secure short-term tenancies. Meanwhile other landlords are doing all they can to attract business and hope the Government will relax its stance on foreign students.