UK student rents have risen by up to 18 per cent in certain parts of the country as buy to let property investors cash in on a nationwide shortage of accommodation.
Some students are spending as much as 65 per cent of their student loan on accommodation, according to new data from specialist online agency StudentTenant.
Much of the hike in UK student rents has been attributed to a growing demand for higher quality accommodation. This has led to some landlords spending considerable money improving their properties in order to facilitate charging higher rental prices to target this market. Others have responded by dropping out of the student market and targeting young professionals instead.
Managing director of StudentTenant, Danielle Cullen, explained: ‘In the past, landlords could invest into an older property, fill it with some second-hand furniture, and bring in a regular income over the course of the university year. But, with the gradual rise in standards for student accommodation, we’re not only seeing landlords drop out of the student rental market but we’re also seeing a rise in prices. Given the choice, many students would prefer to live in high-quality accommodation, and landlords need to improve their properties to remain competitive. But this is driving rental prices up even more. Landlords should be sensible with their renovation spending as 5-star luxury is great, but doesn’t hold up well with new tenants passing through every year.’
However, the unsavoury side of the push towards higher quality, more expensive properties is the effect it has on students at the lower end of the income bracket. The loan allowance a student receives is dependent on their parents’ income. It can be as much as £11,007 per year for students living alone in London with parents earning below £25,000 per annum. However, many prices are beginning to push this bracket, leaving students with little extra income.
Cullen said: ‘I’m consistently shocked when I see the rising student rental price figures each year. The student property market is starting to spiral out of control. It’s becoming apparent that higher education is becoming less and less affordable for students from lower-income households, who are unable to get additional help with their finances.’