Course fees may have negative impact on landlords in University Cities

Course fees may have negative impact on landlords in University Cities

As landlords across the UK with student property insurance, prepare to make necessary repairs to their properties as the students go back to their family homes, many will be wondering what impact the hike in student fees will have on their business.

High levels of students, high profits for landlords

The soaring student population over the last few years has been of great benefit to private landlords in many university cities. Most universities now have many more students than their own accommodation can cope with, opening up opportunities for private landlords prepared to offer quality accommodation and sign up to university accreditation schemes. Many have found their businesses overwhelmed with demand from student tenants looking for a home in new surroundings. Landlords have gone out and purchased landlord insurance on several other properties as they have expanded their portfolios to cope with the lucrative business coming their way.

Higher course fees creating uncertainty

Now, however, the massive rise in student’s fees may well have a negative effect on business for residential landlords. For example students who now will be asked to pay £9,000 in course fees may well decide to look for a University near their home, and in a bid to avoid further financial burdens stop at home with their parents while they complete their studies. For many others the fees may persuade them not to go to university at all. Others may still go to the university of their choice but decide to cut back on the amount of cash they are prepared to pay in rent. This in turn could cause competition at the cheaper end of the market but leave landlords with better quality property having to cut their rents to attract tenants.

Wide repercussions

Of course if the higher course fees result in a large drop in the student population then whole towns will feel the consequences. As well as landlords possibly experiencing void periods, shopkeepers, pubs and restaurants will all suffer. There is little landlords in university towns and cities can do about the risk and they will have little idea if the course fees will impact on their business until the late days of August when A level results come in. Only then will they know if their investments will continue to prosper or if they will have to cut their rental demands in order to avoid void periods.

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