A lack of finance deals available to landlords will lead to a severe shortage in student accommodation for the forthcoming academic year warns Landlord Assist, the nationwide tenant eviction and rent collection firm.
With the academic year over, students are already turning their thoughts towards next year’s accommodation.
Graham Kinnear, MD of Landlord Assist, believes students will find their search for suitable accommodation far more difficult than last year, and is urging them to start looking now to avoid disappointment.
Kinnear blames tighter control on mortgage lending for a supply shortage of property in the private rented sector, and believes this could affect the choice and rental premiums of properties in many university towns.
Kinnear said: “The economic downturn has made it increasingly hard for private landlords to finance new student housing and this could lead to demand far exceeding supply in many university areas.
“Students may find it more difficult than in previous years to secure accommodation and may find themselves having to pay higher monthly premiums as increasing demand will ultimately drive rent up.”
His colleague Stephen Parry, commercial director at Landlord Assist, added: “There is a real need for more quality student accommodation throughout the UK. By restricting the availability of finance, landlords are unable to expand their portfolios and the ultimate losers are those in need of rented accommodation – students.”
Despite a shortage of quality housing stock, higher education and student accommodation remains the best performing property sector for landlords, with strong levels of demand, full occupancy levels and good prospects for rental growth.
Kinnear continued: “The student accommodation market remains a prudent option for landlords, not only because more people are opting to go into further education nowadays, but also because students tend to stay for at least the whole academic year at a time.
“Hopefully we will see lending restrictions lifted in the near future and cheaper mortgage products reintroduced from lenders. Investors will then be able to expand their portfolios and new properties will start to filter through in student areas.”
