Letting to students is catching on again

How renting can benefit tenants and landlords
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It's that time of year again when pencil case sales soar and parents breathe sighs of relief as their adolescent offspring heads back to college. Landlords too may welcome the start of a new term heralding another influx of potential tenants. Last year saw on average 21,000 completions for buy-to-let properties with a mortgage value in excess of £1bn but has this radically improved the housing situation for students?

It's that time of year again when pencil case sales soar and parents breathe sighs of relief as their adolescent offspring heads back to college. Landlords too may welcome the start of a new term heralding another influx of potential tenants. Last year saw on average 21,000 completions for buy-to-let properties with a mortgage value in excess of £1bn but has this radically improved the housing situation for students?

"Not really," says Ian Stone, sales and lettings director, of the London-based agency Bushells: "We advise landlords to buy one- and two-bedroom properties, where yields are higher and which rent easily. Students generally want larger properties but four-bed properties can stick." The student market may appeal to landlords at this time of year but Mr Stone cautions against targeting this market: "It's very active in September but there's little for the rest of the year so unless you're permanently renting to students I'd advise against it."

Many landlords have other reasons for not renting to students, although horror stories are legendary on both sides: landlords speak of mayhem wrought by careless adolescents; students tell of greedy landlords failing to return deposits on substandard and dangerous properties.

Ian Stone is optimistic: "Students are a lot better these days and many of them have parents who come with them to view properties and who act as rent guarantors."

Years of experience have enabled Mr Stone to see both sides. Some lower-grade, and inevitably cheaper, properties are targeted at what he calls "free-fall" students, who do not have parental backing. Yet the key to securing good accommodation may lie in the student's chosen vocation. As lettings manager, he used his own code: "We shied away from the arty, creative ones such as fashion designers, who might paint their rooms black, in favour of trainee accountants."

Mr Stone tries to persuade reluctant landlords that student let doesn't signal disaster: "Some of them are lovely people and I try to get landlords to meet them, but often they will only rent to young professionals." He warns appearances may deceive: "Someone can come into the office and be well-dressed in a smart suit. They say they've got a good job and on paper appear to be perfect but when they move in they turn into the tenant from hell. They don't pay and amazingly credit checks haven't picked them up."

For the last two years, Mr Stone has rented his own investment property to students - "three well-bred young ladies". He has no qualms about repeating the experience: "They were perfect, always paid their rent on time, and left the place in an immaculate condition."

Students and landlords can protect themselves from abuse by using lettings agents approved by NALS, the National Approved Lettings Scheme, a government-supported body launched last year which provides a professional, regulated service for landlords and tenants. NALS believe students are "a vulnerable group" in the housing market. Regulating the industry should give some protection but a shortage of accommodation - in London alone there are more than 100,000 students looking for private rented accommodation - may persuade students to approach unregistered landlords.

The property boom may not have profoundly affected the rentals market - the lettings industry is forecast to rise by 13 per cent over the next five years - but has it pushed students further out of city centres in pursuit of affordable accommodation?

Ten years ago, Bushells South West area lettings manager Lara Coppo saw many students registering for accommodation but believes most are now priced out of the market and have been replaced by graduates: "We get some at the top end whose Mummy and Daddy are paying for them, but most can't afford rents of £120 a week to live within half an hour of the river. Below that, you're looking at ex-council accommodation at the lower end of the market."

Josef Church found himself trawling the lower end of the market for the three years he studied at the University of Westminster. In 1997 he searched for a large house for himself and five other students and "jumped at the chance" of a six-bedroom property in Turnpike Lane, north London, for which they each paid £57 per week. On moving in, he found the house less than ideal: "The insulation was useless. There were gaps under my window ledge and it was icy cold."

The students found themselves sharing with unwanted tenants: "It had mice, cockroaches and even slugs by the time we moved out." The "dodgy" landlord was unwilling to undertake improvements and the house's garden was overgrown and unusable. On moving out they found their deposit deducted for "missing" items such as curtains.

Mr Church rented other flats during his time in London and kept rents low by using living rooms as bedrooms, producing a weekly rent of £65 for his last shared tenancy in Finsbury Park. This year he moved to Edinburgh for a postgraduate degree in periodical journalism at the University of Napier and has found a two-bedroom flat near to the Royal Mile which he rents with a friend for £575 monthly: "It's much better quality, very central and a lot nicer than the flats in London - and there are no 'pets'."

NALS: 01926 496683

Bushells: 0207 924 3737

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