The massive hike in university fees has had an unwelcome affect on the numbers of students seeking accommodation in London and in an attempt to fill empty rooms, some property developers are using innovative marketing strategies to attract student tenants, including free iPads and driving lessons.
Why is demand for student accommodation falling quite so dramatically?
Tuition fees are now a staggering £9k and rather than risk starting their working lives with thousands of pounds worth of debt, many would-be students are choosing to find a job instead. And who can blame them—I would probably do the same if I were in their shoes.
High student occupancy rates in conjunction with stable rental income has seen the student housing investment market increase from £350 million in 2009 to more than £2 billion at the start of this year. As a result, many property development companies have been targeting landlords with the promise of high returns on their investment
The sudden fall in student numbers is having a devastating affect on what has previously been a very lucrative market for landlords, particularly at the higher end of the market in London. The student let market has also been affected by tighter government restrictions on non-EU students and many would-be students from abroad have been unable to secure a visa to come to the UK to study. This negativity is also reflected in lenders—many are moving away from student property development sector over visa and fee concerns.
However, despite these challenging times, many experts feel that the situation will improve over the next couple of years and student numbers will gradually return to normal levels.
