The London student market offers a lucrative space for landlords and multi-property owners. Research has counted 344,065 students (undergraduate and postgraduate) residing in London in 2022. With the recent news that London has been voted the top student city among a list of 160 destination cities around the world, this number is expected to grow further.
This is proof that the student population is an emerging market that landlords can take advantage of. It’s a golden opportunity for property owners to grow their portfolios.
In this article, you’ll learn more about the London student market space, the factors influencing its growth and the opportunities that you can grab to conquer this dynamic housing market successfully.
An Overview of the London Student Housing Market
The London student housing is mainly regulated by 3 laws.
- The Housing Act 2004. This is the primary legislation that categorises the types of student housing. It also sets the health and safety standards for student rental accommodations.
- The 2019 Code of Practise for the Management of Student Housing. This sets a standard that property management groups and service providers have to adhere to.
- The 2022 Code of Standards for Larger Residential Developments. This is applied to accommodations in universities where housing establishments managed by higher education institutes follow specific management standards.
These laws were put into place to meet the growing demands of student accommodations in a post-pandemic world.
Apart from that, the students flocking to the city are faced with rising rental prices and a dwindling supply of properties for rent. This is caused by a low housing supply, slow property development and the after-effects of the inflation and interest rate increase.
Factors Influencing Student Accommodations
Given the current scenario of the student housing market, we can identify 3 factors that property owners should focus on so they’ll know how to fill the gap in this new market.
PSBA PREFERENCE
There’s a growing preference for purpose-built student accommodation (PSBA) because it’s built to meet the diverse needs of the student demographic. As mentioned, the city of London is a popular destination for international students. With the city being a melting pot of different cultures, backgrounds and personalities, one can expect that students will have different preferences when it comes to their housing options. The PSBA is built to provide students with facilities that cater to their unique needs. Among the amenities include study lounges, high-speed internet, communal spaces and on-site security.
Unfortunately, there’s a shortage of PSBA units because fewer developments are being approved.
INCREASING STUDENT POPULATION
Second, the increasing student population is putting pressure on housing demand. One article reveals that there are 4 students for every PSBA bed in the school year 2021 to 2022. The slowdown in PSBA developments partly causes this and it doesn’t seem to be improving over time. In the same article, it’s also revealed that developers are not getting enough approval to meet the influx of students in London. This is most likely going to push rental prices higher to make affordability an issue.
ONLINE LEARNING
Third, higher education institutions continue to offer online learning and this is causing a noticeable effect on housing dynamics. Students require accommodations that are equipped with adequate space for remote learning. This includes dedicated places to study and high-speed Internet. Adaptability will play a huge role in maximising the rental income and occupancy rate of student accommodations.
Opportunities in the Student Housing Market
Given the factors affecting student accommodations, how can property owners and landlords position their portfolios to benefit?
FILL THE PSBA SUPPLY GAP
Although there’s a preference for PSBA, the lack of units is pushing students to turn to private rental properties. Private property owners can meet this supply gap by equipping their properties with the same amenities that PSBA can offer. Widen your market reach to reach students - especially if you’re located near educational institutions.
ENJOY HIGH RENTAL YIELDS
In general, rental income has been steadily rising in London - including student housing. If you can tap into the student housing market, you can enjoy a steady flow of income. The high demand coming from students will increase the occupancy rate of your property. All you need to do is to transform your multi-properties to meet the needs of students. Make them see the value in your property and you can attract students as short-term tenants.
LONG-TERM INVESTMENT POTENTIAL
The demand for student housing is seasonal - but it’s an enduring demand. Year in and year out, you’re property will enjoy a steady flow of student tenants. Of course, this means the availability of the unit is influenced by the academic calendar. Synchronise it with nearby educational institutions so you can increase occupancy rates.
USE THE HIGH TURNOVER RATE TO COLLECT POSITIVE REVIEWS
The enduring demand for student housing comes with a high turnover rate. To keep occupancy rates high, you’ll need positive reviews from previous students who stayed in your property. Getting positive reviews is only possible if you deliver exceptional property management services that meet student expectations. This includes prompt repair and maintenance services - and maybe even housekeeping.
Tips to Successfully Conquer the London Student Market
Private landlords and multi-property owners are given a chance to reach a new market that can open doors to a steady rental income. You can maximise this opportunity by following these simple tips.
- Understand the student demographic. Get to know the specific needs of the student demographic that you’re targeting - local and international students. For instance, students have environmental concerns that drive the demand for eco-friendly and sustainable rental properties. Equip your properties with energy-efficient appliances, green spaces, etc.
- Tailor property amenities towards learning convenience. Customise your property to be conducive to learning. Incorporate study areas, high-speed Internet, etc. Create spaces that are free from distraction so students can focus on what they need to do. Not only that, students come to London with the primary purpose of learning - but it doesn’t just happen in educational institutions. Having a sense of community also matters. If you can give them access to communal spaces, this would expose them to different people and experiences.
- Connect with educational institutions. Forge partnerships with universities and higher education institutions to establish a steady flow of student tenants. This connection can also help you gain insights into what the students will need. It’ll give you ideas on how to properly furnish your property.
- Leverage digital marketing. Students are highly engaged in the digital world - making it the best place to reach them. Engage with the student population online and give them a glimpse of what your property can offer. Create social media campaigns and provide virtual property tours. This will open your property to both local and international students.
- Partner with a property management company. These professionals can help you market to potential student occupants, deal with the high turnover rate, widen your market reach and even provide housekeeping services to meet the high standards expected by students. If you have multiple student housing units, property management companies can take over the vetting of tenants and make sure your property is in sync with the academic calendars of nearby institutions.
Conclusion
The London student housing market holds promise for property owners and investors who wish to expand their portfolios. The low supply of PSBA and the growing student population opens an incredible opportunity for private property owners. Take advantage of this new market to maximise the earning potential of your properties.
Partner with a property management company that specialises in flexible letting so you can enjoy their expertise in the ever-evolving rental market in London. As the student housing market continues to flourish, they can strategically position your property to attract the student population and embrace collaborative partnerships with educational institutions. With the right help, you can enjoy unparalleled growth in your portfolio and a steady stream of rental income.
If you’re convinced that this is a market that you’d like to conquer, let’s talk about your options. Let’s discuss how we can transform your property into the best student accommodation in London.
