What do students want from private rental accommodation?
As hundreds of thousands of students start returning to university over the next few weeks, a new report unveils what students most desire from their private rental accommodation.
According to The Mistoria Group, leading investment specialists in student property, top of the ‘want’ list is a quality white goods (83%), superfast broadband (75%), security (55%), approval to keep a pet (25%) and a large plasma TV (16%). Hitting rock bottom are luxuries like a hot tub (1%) and garden terrace (1%). The most common downfall of student digs was cited as poor quality build of the property and furniture, followed by poor internet connection.
The research also shows that the majority of students (91%) would most like to live in shared accommodation and just 9% opted for a private, self-contained flat. When asked what household bills concern them most, gas and electric came top (94%), followed by food (83%), telephone and broadband (50%) and contents insurance (16%).
Mish Liyanage, Managing Director of The Mistoria Group explains, this sends a clear message to landlords and investors: “We know that the most important considerations for students when choosing rental accommodation is price, space and location. This research gives us an insight into what students most desire from their property and it show us that the vast majority of want to live in high quality, shared accommodation, with good internet access and affordable bills.
“If landlords and investors provide the right type of property, they will be able to attract lucrative students. Recent research* shows that 69% of landlords and letting agents prefer to let to students and 84% agree that students make good tenants. The popularity of students is
down to better rental yields (76.5%), an annual market for new students (53.7%), rent is guaranteed by a parent/guardian (45.6%) and rent is paid promptly (25%). *(Source: Glide, and Accommodation for Students, July 2014).
“Student accommodation can offer a number of attractive features to investors: yields are high as students settle for less space than other tenants; occupancy is typically high; and it is neatly counter-cyclical, as more people go to university during economic downturns.
“A Mistoria HMO offers between 8%-10% cash return on the rental income% PA return of investment from day one (this is not a projection). PBSA yields are traditionally guaranteed by the developer for the first 5 years (although the actual annual return from day one is less) to ensure that by year six, the investment will potentially produce 9%. This is subject to current market trends of an annual rent increase of 3% remaining.
“Student housing is increasingly a global asset class. Over the last two years, there has been a huge surge in student housing investment activity Investment in student accommodation is certainly big business in the UK right now. There was £5 billion worth of standing stock and development sites sold in 2012 and 2013, and the early signs for 2014 suggest that we are likely to see high levels of investment activity this year*. In the first four months of the year, there have been transactions worth £950 million and this equates to over 17,000 beds. (* Source: Savills, May 2014).”