Tuesday, 23 March 2010

Student Lets - The Future Looks Bright

Headlines have recently been full of speculation on imminent cuts to Government funding and Britain’s Universities have been in the limelight. There has been much talk amongst Property People about the impact on Landlords like us who own and let Student Properties.

Rarely a year goes by when we don’t have to amend our strategic plan to accommodate the Government’s latest changes in regulation and funding, often with very little notice to adapt. So where we can be ahead of the game we take the opportunity.

Today I have been looking at historical and current student numbers & applications and in my view the future looks bright.

The following figures are compiled from information on the UCAS website for all UK applications to Higher Education. Further info
Total UK
Applications
2008 502461
2007 454148
2006 432196
2005 444630
2004 413334
NB: top up fees introduced in 2006

The statistical section of the website is not fully updated for 2009 but figures released on 8 February 2010 in the press release section show that UK applications to Universities for 2010 have hit an all time record at 570,556.

Although cuts are predicted to University budgets for 2011-2012, the Universities have indicated this will more likely impact on quality than numbers on roll.

Couple the above information with the changes in Planning Regulations regarding HMO’s (Houses in Multiple Occupation) whereby Planniing Permission will be required for Change of Use to a HMO from 6 April 2010, then you can see that much of the existing stock of Privately Owned Student Properties are likely to be much sought after for the foreseeable future – as long as Local Authorities do not introduce the planning changes retrospectively which seems unlikely.

There will always be exceptions to this and much depends on an individual university’s performance. My advice to anyone who intends to purchase or hold existing Student Accommodation is to do your research. The property should be as close as possible to the University – students want to fall out of bed and into University and the property should be kept in good condition – students deserve a decent place to live even if they are a bit untidy.

For my own purposes I have researched Exeter University Student numbers which some of you might find useful. I got these directly from the University’s own website.

Student Numbers
2009 17210
2008 15523
2007 14252
2006 13369
2005 13827
2004 13554
2003 12930
2002 12442


Since I invested in Student houses in Exeter, Student numbers have increased approximately 33%, my houses are within 15 mins walk of the University, 10 mins from the City Centre and are maintained in excellent condition.

Many people argue that the Universities are building plenty of their own accommodation. In Exeter this is taken up by 1st year and overseas students who generate significant funding for Universities. I only deal with 2nd & 3rd years who no longer want to be in University Accommodation and are unlikely to be accommodated by them anyway.

Consequently I have never had a problem letting my properties at the best market rents and I can see nothing that is likely to change that.

4 comments:

Nick said...

What do you do with your properties over the summer when students are on holiday?

Jo King said...

Hi Nick

We do our annual maintenance & redecoration, we only get one month so it's not long.

Jo

David GW Bartlett said...

Hi Jo. I'm now following your RSS feed, just thought you'd like to know. Keep up the good work!

Jo King said...

Thanks David. Hope to meet you at the South West Property meet, I think you have a lot to contribute.

Jo