Student rental market at saturation point?
Images courtesy & copyright of Remarkable Group
It’s been well-documented that Cardiff has seen an unprecedented growth in Purpose-Built Student Accommodation (PBSA) rooms in recent years, with thousands more currently being built, or in for planning permission. In the last week, approval was granted for four towers – ranging from 11 to 32 storeys – to be built next to the Mercure Hotel on Newport Road. However, we’re already seeing signs of the bubble bursting.
We’re aware of several PBSA developments that are not yet close to 100% occupancy for the forthcoming academic year, and with the new university term starting imminently, we have to question how the vacant rooms are going to be filled.
On average, the cost of a room in one of these PBSA developments is £660 per month (bills included), which equates to around £600 without bills. In comparison, the average cost of a room in a traditional house-share in Cathays is £320 per month, meaning PBSA rooms are nearly double the cost. Yes, they may offer an en-suite bathroom and some fancy finishes, but their locations are typically further away from ‘studentville’ Cathays. More importantly, there are very few students who are able to fork out £660 per month… and nowhere near as many as there are PBSA rooms.
What happens next?
Currently, traditional student house-shares win all day long. Whilst they may not be up to the same standard as the new PBSA rooms, they’re far more affordable and are better located for most students, so the demand remains very strong.
However, the people with large sums of money invested in these PBSA projects will not want them running at anything but 100% occupancy, so they will surely soon drastically reduce their prices in order to compete. When this happens, it will pose a threat to typical student house-shares. It’s probable that areas like Splott and Adamsdown, possibly even Roath – where a good number of students currently reside – will feel the pinch first, along with any houses that are overpriced and not maintained to suitable market standards.
As a landlord, what do I need to do?
Our advice as Cardiff's largest letting agency is to ensure your property is in good order. Even if it’s not brand new, there remains a strong market for well-maintained, good-value houses and flats. Small improvements to items like kitchen flooring and the changing of seals on sinks/baths/worktops can make a big difference.
Most importantly, make sure you have a letting agent that’s on the ball when it comes to feedback and recommendations. Every letting agent should take a keen interest in the properties they look after and suggest improvements that offer value for money.
Your letting agent should also ensure your property is seen by as many prospective tenants as possible. How else will they achieve the highest possible rent for your property? As your benchmark, CPS Homes invest £250k per year in Cardiff marketing…
Find out more about the saturation in the student rental market by reading our recent article entitled: Is the rapid rise of city centre student living in Cardiff a cause for concern?
Whether you're a landlord or student, we can help you rent out your property or find you suitable student accommodation in many areas across the city. To find out more, get in touch today on 02920 668585, email: enquiries@cpshomes.co.uk, or pop into our Woodville Road office in the heart of Cathays.
