COVID-19 student landlord update

COVID-19 student landlord update

CPS Homes logoGiven everything that's gone on, we think the signs for the 2020-2021 academic year are as good as could have been expected for landlords, so is 2021-2022 the greater concern now?

2020-2021: will students need to physically attend uni?

Cardiff's three universities – Cardiff University, Cardiff Metropolitan University and University of South Wales – have all announced they will take a blended learning approach to the new academic year starting in September 2020, meaning courses will be delivered partly on campus and partly online.

In the first term (Sept 2020 – Jan 2021) at least, it's unlikely campuses will host large lectures, though each university is currently exploring the possibility of small-group teaching on campus, such as tutorials or clinical, studio and laboratory sessions.

How often a student is required to physically attend uni in the first term is therefore likely to depend on their course. Those with a practical element to their studies will be able to go in as long as small-group teaching is possible, but everyone else is playing the waiting game. Cardiff University have promised students they will be in touch in mid-August to confirm their arrangements, which feels a little late to us.

Many second-year or later students have already signed up to houses for next year, but without much (if any) need to be uni during the first term, it remains to be seen how many will move to Cardiff in September. A few may choose to study from their family home and save on utility bills, but most of the students we’ve spoken to intend to arrive in Cardiff as originally planned. They tell us they’ve had long enough at home now, so with restrictions being eased across the country and more places reopening, moving is a lot more appealing than it was a few weeks ago.

Anybody who isn't keen to occupy may well look for a reason not to pay rent or to get a rent reduction, so our advice to landlords is to be on top of maintenance and upgrades.

Postgraduate programme start dates delayed

To allow them to manage the number of students on campus, Cardiff University are staggering the start dates of many of their postgraduate programmes. Those that have been changed will now start in October or November, rather than September.

Many students who enrol on postgraduate programmes come from overseas. Cardiff Uni's Chinese Society, who whom we have close links, believe the number of Chinese students in Cardiff next year will be 10% lower than last. They predict that 70% will arrive in early November, 20% in mid-October and the remaining 10% in September as usual.

What this means is that less postgrad students will require accommodation from September; a change to the norm. Instead, they will seek tenancies that start in October and November, which is potentially bad news for landlords who are yet to secure tenants for next year. On the flipside, landlords who are currently redeveloping houses and rushing to get them finished for September may now have an extra month or two.

Be prepared for a wave of postgrad students seeking immediate accommodation come October and November.

The threat from Purpose-Built Student Accommodation (PBSA)

Long before coronavirus was first spoken about, we were warning landlords about the rise and threat of PBSA.

Since the start of the pandemic, we have seen developers of three blocks rush to apply to temporarily let rooms to non-students because of the expected drop in student numbers next year.

Landlords of traditional student house shares already have the option of renting to non-students, of course, but there is limited demand amongst professional sharers or families for properties situated in the heart of the student community that have, due to HMO licensing requirements, been very much geared to serving students.

It could be argued that, in the wake of COVID-19, PBSA looks more appealing than ever to a student. Yes, they can cost a bit more, but the self-contained living they offer could well be the antidote for those concerned about living in traditional house shares due to the virus.

Throw in the fact you're on an individual tenancy (thus no shared liability) and access to a gym in what is a modern, secure building, and you’ve got a rather tempting package.

2021-2022: what’s it going to look like?

Ordinarily, the 'student lettings season' is at its busiest between November and February each year. It's within that period that students – especially first-years – form groups and aim to secure next year’s house. However, with less students enrolling for 2020-2021, it’s going to mean less house-hunters for 2021-2022.

On top of this, those who do enrol may have no need to come to Cardiff for the first term (see earlier), so we could see a delay to the start of the ‘student lettings season’. First-year students tend to live in university-owned accommodation, so won’t have entered into a private housing contract pre-COVID, thus have no real need to be in Cardiff if their course is entirely online for the first term.

As well as a delay to the house-hunting period, a lack of face-to-face teaching means less time for students to form groups, so we may see more demand for room-by-room tenancies; another tick in the PBSA column.

What should I be doing as a landlord?

As we've demonstrated, the market is highly competitive and COVID-19 has introduced previously unforeseen factors, so it's more important than ever to have an attractive property.

For a long while now, we've been encouraging landlords to be proactive rather than reactive, thus staying a step ahead of the game.

Every rented property suffers from wear and tear, especially in HMOs where footfall and use is exceptionally higher. Our message to landlords is to ensure their property maintains maximum appeal, which means dealing with this wear and tear at the earliest opportunity. This is typically Christmas, Easter or between tenancies for more intrusive work.

It’s crucial to be hands-on or to give your agent permission to invest your money in your property wisely. Reacting to a lack of interest when it’s too late is going to mean a drop in income, likewise  dealing with a maintenance issue that has got worse over time is going to be more costly than it was initially, so be proactive, not reactive.

Visit -> Budget -> Plan -> Spend -> Profit.

08 July 2020

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