Is Section 24 going to end student summer discounts?

by Dr Rosalind Beck

9:56 AM, 15th February 2018
About 8 months ago

Is Section 24 going to end student summer discounts?

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Is Section 24 going to end student summer discounts?

An issue which has been bothering me is that when national rent figures are worked out by various organisations, what do they do about student rents? As landlords know, students often pay half rents over the summer. However, since the Government launched its war on landlords, most viciously with Section 24, I believe many landlords who would have allowed students to pay half rent during August and September, for example, will no longer be able to do this.

If organisations which publish rent figures purely take monthly rental figures into consideration, the figures could be skewed by missing what could be an 8.3% increase in rents if 12 months’ rent is charged rather than 11 (of course it could also go the other way in areas where it is hard to let).

For myself, I have now made it policy to ask for full rents for the 12 months of the year. The more of us who do this, the more it will become the norm. It is a shame for the students, but we have been forced into such measures by being taxed on fictitious profit. We have to increase our rents wherever feasible.

In addition, it is also easier to up 4 rents from students by £10 each month, than to up the rent on a small terraced house by that, so the rents on my 4-bed student properties are facing annual increases of at least £40pm, whilst my smaller terraces are only being increased by about £10-£15 each April, because of Government policy (previously, I never increased rents). This means that students are likely to effectively end up subsidising other properties in landlords’ portfolios.

  • What are others doing about this?
  • Do you charge the full 12 months?
  • Did you always do this or have you recently changed?

It would be good to get a straw poll on this as it is not being discussed at all, as far as I know.



Comments

Neil Patterson

10:15 AM, 15th February 2018
About 8 months ago

Excellent and forgotten point raised.

Again some of the least well off likely to pay the price for politically motivated government attacks on the PRS.

Gromit

10:22 AM, 15th February 2018
About 8 months ago

I've charged students on 11.5 months per year for quite a number of years now. I used to do 12 months with a weeks gap between tenancies for refurb work.

I'm having to increase rents by 4-5%pa just to pay for Sec.24 as it now kicks in, and soon for the ban on letting agents fees.

AA

10:44 AM, 15th February 2018
About 8 months ago

Half rents ? Never done that ever. I was having a conversation with my tenants yesterday on this very matter. Market prices in the capital of Basketland (Scotland) in case you had not guessed have gone up by £200pcm for a student 3 bed because tenants can up and leave with just 28 days notice. Sadly students are victims of the laws of physics - every action has an equal and opposite reaction.

Luke P

10:46 AM, 15th February 2018
About 8 months ago

Reply to the comment left by Asif Ahmed at 15/02/2018 - 10:44
And the Scottish government would have us all believe that agent fees ban and PRT have barely had any effect on rents...

AA

11:21 AM, 15th February 2018
About 8 months ago

Every child from nursery onwards should be taught you can tell when politicians are lying when their mouths move 😊

terry sullivan

12:00 PM, 15th February 2018
About 8 months ago

Reply to the comment left by Luke P at 15/02/2018 - 10:46
SNP are liars and incompetent ones at that--hjow mayn SNP assembly members are landlords

wasnt one charged with fraud? what happened to her?

Whiteskifreak Surrey

12:34 PM, 15th February 2018
About 8 months ago

We never charged 50% rent for the summer. Nobody actually does here in South East. Generally it is 11.5 months full rent. Students tend to stay with us as long as they can, making up for a group of 4, if anyone is moving out. Last year we had to increase 5%, we have written a letter to them and all accepted. This year it will be a little bit less. We encouraged them to write about S24 and increase to our local conservative MP, who is in education. Stony silence from her. (NB I spent months corresponding with her, useless really). We are still the cheapest on the market, prices are creeping up every year. Demand is still here, but how long we do not know, as Uni & Council plan a huge student building, financed from our local taxes. Obviously the fact we wait 4 weeks for a GP appointment does not count in this student investment exercise.

Whiteskifreak Surrey

12:35 PM, 15th February 2018
About 8 months ago

Reply to the comment left by Asif Ahmed at 15/02/2018 - 11:21
Well said, AA. Nowadays it is even more true than before.

Grumpy Doug

17:57 PM, 15th February 2018
About 8 months ago

Reply to the comment left by Whiteskifreak Surrey at 15/02/2018 - 12:34Most student blocks are built by the big BTR corporates. Of course their projects are "smoothed" by the Councils and Universities, but at the end of the day the costs to the students will be high in order to cover their corporate salaries, shareholder returns, high running costs etc. Costs here in Bournemouth in Uni accomodation averages out at £650 per month or even higher for the "suites". My most expensive housing is about £410 per room - to a skint student that is a huge difference. Even with S24 based rent rises recently, I can compete with these companies any day.

Whiteskifreak Surrey

18:24 PM, 15th February 2018
About 8 months ago

Reply to the comment left by Grumpy Doug at 15/02/2018 - 17:57
Ours will materialise around 2020-21. So still few years to go for us. I think we will be cheaper anyway. And some students prefer to have a house with a garden, with garden furniture and BBQ. Ours often spend all summer afternoons there, with their mates.

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