Where are the Students ?
Tue 12 May 2020
18,685 students are enrolled at Bournemouth University:
• 16,360 of these students come from the UK
• 860 come from other EU countries
• 1465 are students from non-EU countries. Source Bournemouth University Website
Are Student houses sticking this year in Bournemouth? If you do a quick search on Rightmove, you will probably say yes!
But what are the reasons behind it and are there any alternatives for landlords who own a traditional BTL student HMO?
What is definitely not shifting?
The areas with the most available properties tend to be those furthest from the University in Charminster and the less accessible parts of Winton. The asking prices vary but if you break it down per room the average is £390 per student (ex-bills). Why are they not being let?
There are a number of reasons that the bottom may have dropped out of the market.
Private Halls of Residence – Anyone visiting Bournemouth in the last couple of years, could not have failed to notice the massive blocks of private halls that have been put up just outside of the town centre. Google has twenty-four listed and there are planning applications for more already submitted. Big business has looked at the student lettings market and decided that it will provide a decent return for the next few years. Whilst the rents are much higher in these new halls, from £650pcm - All the rooms include an ensuite,bills and 24hr security as standard. Many of the blocks now throw in cinemas, a gym, and events such as pizza nights and parties. Its working with one block reporting that it has achieved a 60% rebooking of 1st years moving onto their 2nd year.
Global Pandemic - Although a lot of the houses that would normally be reserved in the January/February were still available in March. The Coronavirus and lockdown are going to affect everything. It is predicted nationwide that there are going to be less students, both foreign and home grown competing for university places or accommodation.
Quality – Although they are a lot cheaper. Compared to these swanky new builds, the traditional student house can look and feel somewhat dowdy. One bathroom between four is not uncommon. Damp wall and peeling wallpaper furniture that looks like it has been retrieved from someone’s grannies’ loft still abound. I am also going to throw in that perhaps with the revolution in digital communication and changing social attitudes, perhaps the young do not feel the need to live with five or six of their friends anymore. The local authority in recent years, have become increasingly intolerant when it comes to parties or any activities that might disturb Bournemouth more gentile residents.
“ALMOST 80 per cent of Bournemouth University’s income came from tuition fees last year, meaning it could be hard hit by a predicted drop in student numbers due to coronavirus The University and College Union has criticised a package of government support for the sector, after it warned of a £2.5 billion funding “black hole” caused by a collapse in student intake due to Covid-19 “- Source Bournemouth Echo 10/05/20Brexit. 860 students who come from Eu countries study at Bournemouth University. Whilst they still will have access to student finance for the academic year starting in September2020. There is no guarantee this is going to continue post Brexit. Students will also have to apply for a visa for the following years.
Are there any solutions for landlords seeking tenants?
Family Homes -There is some good news for landlords renting family homes. Plans to expand services at Bournemouth Hospital have been submitted, which could create 800 new jobs, all those people will need somewhere to live. Charminster and Winton have good access to the site and are well placed to be a choice of accommodation Whilst family homes rent for less, the tenancies last for twelve months, generally the houses are rented unfurnished. There is less wear and tear and probably and definetly a less hands on approach needed to the tenants
Continued growth of the private rented sector (PRS) – Whilst the student letting market may be shifting. Pre C19 figures showed that almost one in four households will be living in PRS homes by 2021, rents in Bournemouth continue to rise year after year and agents seldom have any reasonably priced, well maintained properties available for long.