The student Bubble inflating or about to burst?

Hi Chris,

I would stay in contact with the University and keep a constant eye on how desperate they are to find accommodation for their students.

Hi Chris
I've let two large student houses in Oxford for over 35 years. I've seen through all the exacting legislation and all those Landlords, large and small who 35 years ago thought it beneath them, coming into the market. High yields bring competition.

But I've never had it so good but I do it by self managing, well maintained properties, keeping the price below those charged by agents. They are always snapped up in November, for the next academic year, by fantastic tenants. I show several groups, so I can choose and no one has ever turned my houses down.

I often get groups who turn down University accommodation to live at my houses. I think you should compete and make your houses as attractive as possible. If students did fail could you not take professionals?. In Oxford we had a good market for both.

Hi Chris. I can see the bubble bursting in Cardiff. Here, too, there are constant new developments aimed at students. However, the rents advertised are extortionate - I don't know how any student could afford them or be willing to pay them. My rents are a third of what some of the institutions are advertising.

As Yvonne says, there is also often a strong demand by professionals and/or ex-students who can only afford shared housing at their stage of life and wouldn't want to knock around in a house all to themselves even if they could, often.

I think the market is vulnerable though. I have a house in another area where the University decided to move the campus to another town. That was pretty disastrous and it was necessary to be flexible about who could then occupy the house as the students all disappeared.

I tend to think though that with the big old solid houses, they will always have a use. If the worst comes to the worst it might later be possible to convert many into flats to sell if the market in big student houses falters.

Hi Chris, I'm in Coventry and am about to buy 3 student lets so I certainly hope the bubble isn't about to burst! I'm buying in areas that service both Coventry University and Warwick University (Chapelfields / Earlsdon) so I have hedged my bets a bit. My opinion is that as long as your houses are in the right area you should be fine in the medium term but that is only a guess as I haven't bought them yet.

Perhaps I overly cautious and some would say pessimistic ! Obviously the university thinks there will be a long term demand or else they would not be building so many properties for their students.
I think what will happen is that students will have more choice inasmuch as there will be more availability than there is demand.
Good luck with your purchases.

Reply to the comment left by "Chris wood" at "12/01/2017 - 18:02":

I read the information for new students at one of the Cardiff Universities. It was offering accommodation for around £105 per week on the basis of a 9-month let. Obviously, it can then rent to others, maybe overseas students for the remaining 3 months. Perhaps that's what we should start doing. They also had a sentence or two along the lines of: 'Whatever you do, do not go and rent a house privately. You should always only rent from the University or from the private houses we recommend' I thought that was a bit of a bloody cheek. Anyway, if the students come from further afield or get a job in Cardiff they may want to stay for 12 months and not 9. If that is the case then the private inclusive rents that can be got for £350 per month in the private sector would be much better value for them. The University is scaremongering and attempting to get a monopoly from a captive audience. Whilst this may work with first year students, it often won't with second year students who are quite capable of seeing through this.

I run a few HMO'S all let to students in Scotland. My competition is now the big purpose built student blocks built by companies. I can easily undercut the eye-watering rents they charge and still get good returns. I think the key thing that you have to do is have well maintained and nicely furnished properties. The days of squalid student let's are over! The new places are all nicely decorated with good furniture. So you have to go toe to toe with them and maintain a reasonably high standard. There are some landlords who are still trying to let manky flats with dodgy old furniture. These flats, year after year, are still advertised after the student terms have started missing the boat. You think they'd learn!

I agree totally with your comments. Indeed, I first came up to Coventry about thirty years ago because my girlfriend at the time had just moved up to Coventry to do her degree. She went straight into a private student house because there were no places left in the halls of residence. It was a grotty terraced house some distance from the university (then a polytechnic). She had to walk well over a mile to college or catch a bus. Her room was small and there was the obligatory mould around the window and corner of the outside walls. The kitchen and bathroom where very basic and dated - and once again mouldy ! Those were the days !!
Recently a private company has been buying lots of terraced houses in the area but only ones with high ceilings in the rooms. They strip them out completely from bottom floor to the roof (including walls in some cases) and add an extension. The result being what was once a two bedroom house is turned into a five bedroom house each with en-suites plus a dining/kitchen (communal room) in the extension. They are filling them up at £495 per person per week (bills inc). They are small rooms but functional and modern. In a shared house where the students know each other I do not think it is totally necessary for each room to have a shower, but certainly a max ratio of 1 bathroom+loo per 3 people. Where people in an HMO are not friends that I think the trend is for each room to have its own shower. They prefer to have the privacy and convenience and pay a little more.