Plenty has been said about George Osborne slashing the tax breaks made available to landlords, and more recently his 3 per cent stamp duty on private properties. Announced in Osborne’s Autumn Statement, the hike is equivalent to roughly 11 months’ worth of income for an average landlord.
While rental prices are largely defined by market forces and in the past landlords have been unable to pass on expenses by raising their rates, it is becoming incredibly likely that this will change as landlords across the private rental sector find themselves hit by inordinate additional outgoings. And student tenants stand to be affected the most by these changes.
“If extra costs from buy to let policies are passed on to tenants the situation will only worsen… The problem is particularly bad in London, where students are facing the highest rents,” says NUS Director of Welfare, Shelley Asquith. At present, student tenants in London pay an average of £30 per week more than elsewhere in the UK, and double what students in Wales pay in rent. But this often works out as less expensive than living in student halls in London, where the weekly average rent is £270.
“Discouraging investment in property could lead to less private sector rental stock which, in turn, would put further upward pressure on rents and make life tougher for student tenants financially,” says Simon Thompson, Director of Accommodation For Students. This will only serve to drive a wedge between private landlords and their student tenants, which is a shame, as landlords actually want to let to students.
According to a recent landlord survey by Accommodation For Students: “Views towards students as tenants were generally favourable… Two thirds of respondents prefer letting to students than non-students, and over 80 per cent think that students make good tenants in general.” It makes sense; the majority of students come with guarantors and fixed length tenancies, reducing financial risk on the part of the landlord. “A plurality of respondents report from their experience that students are less likely to go into rental arrears than non-student tenants,” the report adds.
There have been calls for rent control to be introduced as a solution for students, with the Green Party’s Siân Berry making rental caps on student tenancies a central part of her London mayoral campaign. When quizzed on the topic of helping students during last month’s People’s Question Time, current mayor Boris Johnson simply said: “rent controls do not work in general.”
George Spencer is CEO at Rentify.