How has the coronavirus outbreak affected the student accommodation market?
Covid 19 has had a profound impact on the student housing market, with uncertainty for students, universities and private landlords. Reports by the Telegraph suggest that while many universities have closed their lecture halls and released their tenants from paying rent, private businesses that run the student accommodation have not been as flexible. Students in many quarters have found themselves liable to pay for halls of residence for the summer term, even though there are no lectures to go to. The bill falling to unemployed students often relying on the bank of Mum and Dad.
While this instance is particularly punitive for students, in general, the circumstances are difficult for both sides. Businesses have cash flow responsibilities and the worry of defaulting on an expensive investment.
The story regarding student halls of residence, is one instance in a wider series of problems, but these types of reports will no doubt leave customers in the post Covid-19 world wary and distrustful. Many students in the future may opt for the cheaper and safer option of remaining with family, and attending University through distance learning courses.
The immediate impact of corvid-19 according to Unite Students, one of UKs largest providers of student accommodation, is an expected rental loss of between 16% and 20% for the 2019/20 academic year.
Private landlords and larger commercial rental providers are now looking to alternatives revenue streams to maintain cash flow and their ability to service liabilities into the future. Some have suggested offering their premises to hospitals looking for additional space to look after the sick, while others will look to the traditional rental market and potentially short lets.
What is clear is that landlords of the future are going to need to be agile enough to take advantage of opportunities wherever they come from. Preparing a property for both student lets and the mainstream rental market may be an option for some. Meaning adherence to a variety of regulations, from standard obligations such as ‘electrics being checked every five year’ as indicated in a guide by Surveys North East on student buy to lets, or the rules from the Government on HMO’s that can be found here.
In other parts of the student housing arena, there are glimmers of light as sanctions start to lift. Home removals is experiencing a short term boom, as those who have been waiting for lock down to ease are now able to have their items moved.
If you are a residential landlord, we’d love to hear from you about any innovative approaches you have been pursuing to manage cash flow during the lock-down period, why not drop us a comment below.