Students prepared to pay more for quality
Cardiff’s student housing market has seen a sharp rise in the number of tenants prepared to pay £325 per month rent, according to CPS Homes, one of the city’s leading letting agencies.
Across the UK, student rents have risen by an average of 2.4 per cent since 2011. The weekly average that a student pays now stands at £69, according to website Accommodation for Students, which surveys 100,000 properties in 77 towns.
However, demand for improved and refurbished accommodation over the past two years by students in the Welsh capital is allowing private sector landlords to increase their rents far beyond this national average.
The agency, which has a new flagship branch on Woodville Road in Cathays, found homes for 130 groups of students in November alone, with around 30 of these tenancy agreements being at around £325 per room per calendar month (PCM).
“It just goes to show, if the standard is good enough then you’ll find tenants to pay good money for it,” says Nikki Lewis of CPS Homes. “The £250-£275 per room houses are being left behind.”
CHANGING TIMES AND MINDS
A half of the new tenancy agreements at the £325 PCM level that were arranged by CPS Homes up to December 2012 involved the promise to tenants of a new flat-screen television.
According to Barrie James, director of CPS Homes, landlords should try to adapt to the changing nature of the student market and meet demand.
“The term ‘student housing’ itself almost suggests a ‘that’ll do’ mentality towards student accommodation that is largely – and gratefully – a thing of the past,” says Barrie.
“Students today are demanding quality accommodation and clearly they are willing to pay for it. Most of our clients with whom we’ve a longstanding working relationship are willing to listen to what we are telling them about suggestions for improvements to finishes and TVs.”
SPENDING MONEY TO MAKE MONEY
It’s not unheard of for interior designers to be consulted when upgrading student housing to ensure the layout and finishes befit modern student living.
Interestingly, about a quarter of the homes so far let by CPS Homes at £325 PCM have been ‘off-plan’. “The viewing was more based on an idea of the location, exterior and promised works,” says Nikki Lewis.
Likewise, CPS Homes is keen to for landlords to make a ‘leap of faith’. “We’ve just persuaded a landlord currently achieving £275 on a six-bedroom house to draw up plans with a view to getting a seventh bedroom in the dormer and carry out a full refurb for an approximate cost of £40,000.”
Nikki is confident that this will increase the amount of rent the landlord is able to charge monthly to £325 per bedroom.
“When you consider that this is £625 more per month than he is currently making, that’s pretty significant,” he says. “It amounts to £6,875 per annum, even taking into account half rent in July and August, which represents a 17.2% return on that £40,000 investment. Not bad at any time, let alone in this economic climate.”
