The student rental sector is changing rapidly. Landlords are facing higher levels of regulation, not only from Article 4 directions introduced by local authorities, but also from the Government’s Renters’ Rights reforms.
At the same time, the student accommodation market in Brighton and Hove is becoming more challenging. The universities of Brighton and Sussex did not completely fulfil their student allocation last year, and around 700 properties were not let. Many of these homes then moved into the residential rental market.
Local authorities have generally viewed purpose-built student accommodation more favourably than traditional student HMOs. Student occupation of HMOs, particularly larger shared houses, has become less frequent. As a result, a growing number of HMO landlords appear to be considering exiting the market.
Many of these landlords began building their portfolios around 30 years ago and are now approaching retirement age, often without clear succession plans.
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Declining Demand for Student Accommodation
One of the biggest challenges facing student HMO landlords is the decline in demand for student accommodation.
If student numbers fall at local universities, the pool of potential tenants is directly reduced. This creates greater competition between landlords and makes it harder to maintain consistent occupancy.
Universities are no longer the default route for many school leavers. Rising tuition fees, student debt and high living costs have led many young people to delay higher education or avoid it altogether in favour of apprenticeships or direct employment.
More Students Are Living at Home
Many students who do attend university are increasingly choosing to live at home during term time to reduce costs.
This means they no longer need shared student accommodation. For landlords who rely on consistent occupancy to cover mortgage payments, maintenance and running costs, this reduction in demand can create significant financial pressure.
Fewer International Students
International students have traditionally made up a large part of the student rental market. However, fewer international students are now choosing to come to the United Kingdom.
The previous Government tightened visa conditions, making it more difficult for some students to bring dependants or work during their studies. The current Government has continued this trend by reducing the duration of graduate visas, making the UK less attractive when compared with countries such as Canada and Australia.
As a result, international student numbers have started to fall across many universities, further reducing demand for student-specific housing.
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Course Reductions at Universities
Another major risk for student HMO landlords is that universities have started reducing the number of courses they offer.
Demand for certain courses is no longer as strong as it used to be. If fewer courses are available, or if fewer students apply for them, this will naturally reduce the number of students looking for accommodation.
Higher Maintenance Costs
Student HMOs often require significantly more maintenance and repairs than professional or family rentals.
Student tenants, particularly younger undergraduates, may have less experience looking after a property. This can lead to higher levels of wear and tear, and repair bills can quickly build up and reduce profits.
A More Seasonal Rental Market
Student rentals are also highly seasonal. Many students secure accommodation for August and September during the previous academic year.
In the current market, it is essential that your student property stands out. We believe that modernising your student property will be key to long-term rental success.
Accommodation finished to a high standard is much more attractive to students. The traditional magnolia walls and woodchip wallpaper are no longer sought after. Students are increasingly looking for modern, well-presented properties that meet their needs.
Empty Student Properties in Brighton and Hove
Last year, just under 700 properties in the Brighton and Hove area were not rented to students. Many of these properties then entered the residential rental market.
Unfortunately, the market cannot easily absorb this number of additional residential properties. As a result, many former student properties were left empty during the year.
At Harringtons Lettings, we have a substantial database of student tenants and can provide an honest valuation of what your property is worth in the current market.
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