Soaring student numbers in Leeds are sending the city’s rental market into a frenzy. Students are already reserving homes for next summer on the back of virtual viewings and many are prepared to pay record rents to secure the best properties, according to Josh Buckley, lettings branch manager at HOP Leeds city centre office.
The University of Leeds stated that many courses were oversubscribed this year and offered some students wanting to study law or business, £10,000 cash and free accommodation for the 2022/23 academic year, if they deferred their courses. And it is estimated that the student population in Leeds has risen to more than 70,000.
Josh says: “The pandemic meant a lot of students were hesitant about starting university in 2020 or stayed at home and studied remotely. However, normality returned this year and our student portfolio is currently 100 per cent let and we are expecting this trend to continue next year.
“We are already marketing our portfolio for next summer and have just launched more than 300 properties that are available to rent from next July, which might seem early, when you consider that first year students have only just started university and might not have thought too much about who they want to live with next year, but the demand for property is already there.”
He adds that many students seem to have bigger budgets than before and it is generally the most expensive homes in the best locations, that are generating most interest. According to HOP, Hyde Park is still the most desirable location, due to its proximity to the main university campuses and the city centre. This is closely followed by Woodhouse and Burley. Headingley, traditionally a student hotspot, is still on the radar, though the suburb is also a magnet for young professionals and families.
“In many cases tenants are happy to rely on virtual viewings and will sign for a property without even visiting it.” HOP’s all-inclusive properties, which include electricity, gas, water, TV licence, broadband and contents insurance in one monthly rental payment are also popular due to rising gas prices.
All this makes it a good time for landlords and HOP has seen an influx of student property investors, particularly from the south of England. “Several have taken advantage of our Premium Advance Service, where landlords can receive their 12-months’ rent up front, even if their tenants pay monthly. This enables them to reinvest in further buy to let property or refurbishment works to maximise existing investments,” says Josh.
For landlords who get it right, student property can offer high returns, but for those who get it wrong, it can be painful. Here is HOP’s advice for would-be student landlords:
*Before buying a student property, it is vital to check it has the correct HMO paperwork or a HMO licence if needed and it’s also worth double-checking it meets minimum space standards.
*Even if the HMO licence is in place, the living areas and bedrooms can still fall short of the required new minimum space standards, meaning you won’t be able to renew the licence. It’s always best to speak to a reputable student letting agent to check the regulations prior to making the purchase.
*Students don’t like small, cramped bedrooms and especially cold, damp basement conversions. It’s rarely a good idea to sacrifice living space for additional bedrooms. You also need to consider how many bathrooms the property has in relation to bedrooms.
*Properties within easy walking distance or with good transport links to the major universities will always be popular.
*Super-fast internet and secure locks on external doors are a must. You should provide high quality furniture and decorate to a high standard, with extra touches such as mirrors in bedrooms and shelving, because these can really lift the appeal.
*Usually, a dated property will be hard to let, regardless of how cheap it is.
*Whenever possible offer a tumble dryer to prevent damp clothes drying on radiators.
*Student landlords should factor in approximately 10 per cent of their rental income for annual maintenance to the property. Whilst rents and yields can be very lucrative in the student property market, wear and tear can be considerable too. So, upgrades and improvements, such as decorating, are required at least every five years in student homes and, as well as this, landlords should also allow part of their budget for repairs and professional cleaning in between tenancies.
*Conduct a full photographic inventory and instruct a reputable managing agent that is part of a redress scheme and holds client money protection insurance. Finally, never forget that if you fail to appreciate and look after tenants, it will come back to bite you.