Demand for student lets ‘excellent’ in spite of unstable property market

The Momentum UK Team 22 August 2012

Although tuition fees have risen and the housing market remains rocky, student rentals are one area that landlords are still ‘positive’ about, according to Paragon Mortgages.

The survey also found that demand for student properties is very high with 76% of landlords describing it as ‘good’ or ‘excellent’.

In spite of the hike in tuition fees this year, demand for student properties in the second quarter increased by 20% compared to the same period last year.

John Heron, Managing Director of Paragon Mortgages said:

"The student rental market is one of the largest specialist components of the private rented sector. Letting student property is appealing to landlords as they usually benefit from higher than average rental yields as rooms tend to be let on an individual basis. There are generally lower levels of arrears too as student tenancy agreements benefit from parental guarantees.”

In addition to rising demand, the survey recorded that landlords found the experience of letting to students a pleasant one with 71% claiming that rent payment punctuality was ‘good’ or ‘excellent’. Just over half (53%) described student tenants’ behaviour as ‘good’ or ‘excellent’.

According to separate research by BDRC Continental of NLA landlords, over 70% of professional landlords describe the future investment potential of student rentals as ‘good’,

Heron continued:

"Landlords who let a proportion of their portfolio to students are feeling positive about the market and their experience of letting to students continues to be good. This is an area of the private rented sector which will continue to thrive as long as the demand for university places continues."

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