As the new academic year commences across the UK, it’s an opportune moment for landlords to take stock of the increasing demand for student accommodation and the overall private rental sector (PRS). Understanding the growing student presence in the PRS is essential for landlords looking to capitalise on this demographic’s needs. Students represent a vital part of the rental market, particularly with many opting for private rentals over purpose-built student accommodation (PBSA). In this article, we’ll explore the current landscape, the contributing factors to this demand and why landlords should pay attention to this sector.
The Growing Scale of Student Demand in the PRS
The PRS in the UK is expansive, consisting of around 4.6 to 5 million households, equating to over 9 million renters. Among these, a substantial number are students, with approximately 740,000 students living in private rental properties. This translates to about 8% of the entire PRS. Interestingly, this figure is nearly matched by the number of students residing in purpose-built student accommodation, with an estimated 750,000 student beds available across the UK.
As universities welcome new and returning students each year, the demand for housing inevitably rises. With such a large student presence in both PBSA and the PRS, it’s clear that students represent a significant segment of the rental market, providing landlords with a consistent and often stable source of tenants.
PBSA: Easing Pressure on the PRS
The rise of PBSA has played a critical role in alleviating pressure on the private rental market. PBSA developments, which are designed specifically to house students, have seen rapid growth in many university cities. The availability of 750,000 student beds in PBSA means that students now have more options when choosing their accommodation. This has helped to ease some of the strain on the PRS, allowing for a more balanced market in many areas.
However, while PBSA has certainly had an impact, the demand for private rentals remains strong. Many students still prefer living in privately rented accommodation for a variety of reasons, including affordability, location and the desire for a more independent lifestyle. Furthermore, PBSA options are not always available in every city, and where they are, they may not always meet the preferences or budgets of all students.
City-Specific Dynamics in Student Rentals
It’s important to note that the student rental market can vary significantly between cities. Factors such as overseas student visa regulations, the cost of attending university and demographics all influence demand. Supply dynamics, including planning regulations and the availability of student accommodation, also play a key role in shaping the market in different regions.
For example, cities with large universities, such as London, Manchester and Birmingham, often have a much higher proportion of students living in private rentals. In these areas, landlords can expect a steady demand for student accommodation throughout the year, but particularly during the peak season in September.
In other cities, where PBSA developments are more prevalent, landlords may find that the competition for student tenants is more intense. However, even in these areas, the demand for private rentals remains significant, particularly among students seeking accommodation that offers more flexibility or caters to their specific needs.
The September Surge: A Key Time for Landlords
For landlords, September is always a crucial time in the rental market. This is when the academic year begins, and the influx of new students looking for accommodation leads to heightened demand. The start of the academic year is also a time when many graduates are moving into their first jobs in cities, further boosting the rental market.
The surge in demand during September means that landlords need to be prepared well in advance. Properties should be ready for viewings, and marketing should be ramped up to attract student tenants. It’s also important to ensure that properties meet the needs of students, which may include offering affordable rent, convenient locations near universities and access to amenities such as good public transport links and high-speed internet.
Why Landlords Should Consider Student Tenants
For landlords, renting to students can be a highly lucrative option. Students tend to rent properties for the duration of their studies, typically staying for several years, which can provide landlords with a stable and reliable source of income. Furthermore, with the rise in student numbers, particularly international students, the demand for rental properties is likely to remain strong for the foreseeable future.
Another advantage of renting to students is the potential for higher rental yields. In many university cities, the demand for accommodation is so high that landlords can charge premium rents, particularly for well-located or well-furnished properties.
However, it’s important for landlords to be aware of the specific challenges that can come with renting to students. Properties may require more frequent maintenance or refurbishment due to the higher turnover of tenants. Additionally, students may require more guidance when it comes to understanding their responsibilities as tenants. Ensuring clear communication and offering a well-managed property can help mitigate these challenges.
How Northwood Can Help
At Northwood, we understand the unique dynamics of the student rental market and are here to support landlords in making the most of this valuable segment. Whether you are new to the market or looking to expand your portfolio, our team of experts can provide you with the advice and services you need to attract and retain student tenants.
Contact us today to find out more about how we can help you navigate the busy rental market and ensure your property is ready for the next September surge. Let Northwood be your trusted partner in maximising your rental returns.
