Tag Archives: Rental demand

A call to convert 66,000 student HMO’s back to family homes? Latest Articles, UK Property Forum for Buy to Let Landlords

I have been having a catch up on my on-line reading over this weekend and I have just come across an article which, in my opinion is very ill-informed. A call to convert 66,000 student HMO's back to family homes

Housing supply in many UK cities is being restricted by the conversion of family housing to student lets and local tenants are being prices out, according to new research. International real estate adviser Savills estimates that 66,000 properties or Houses of Multiple Occupation (HMO) now occupied by students could be freed up for conventional family housing through the delivery of more purpose built student accommodation”

The first thing that I would say is that only students want to live near students and the last place I would want to bring up my family is in an area that is highly populated by students.  I love my students tenants but they do not keep regular hours and often return late at night in a happy and noisy mood. There are other issues too but I won’t go into those, most of us who let to students will know what I mean.

For me, the most important point that has been missed is that the cost of converting a family home into a student HMO is colossal and this, coupled with the purchase prices in popular areas, means that landlords have invested a massive amount of money in their properties – will families really want to pay the prices that would cover this investment and also convert the property back to a family home?

In my book “Will You Survive the Mayhem”, I talk about the future of the student market where student numbers are reducing in many areas and there is an oversupply. I have given my predictions of the future of the market and I have warned landlords that we may need a plan “B”.  Plan “B” must, however, take into account that many landlords have big debts on their properties and could not afford to use them for family lets because of the reduced income. There are other markets for which these properties could be used which are realistic and would help to increase supply but Savills are dreaming if they really think that building more purpose built student accommodation is the answer to the shortage of family homes.  They have also overlooked the fact that students can’t wait to get out of “institutional” accommodation and share little houses, at least for their middle year, and there are many empty rooms in purpose build student accommodation in areas where the student population has receded since the increase in University fees.

The article goes on to say

The result is a double whammy for local non student tenants and aspiring home owners. Not only do students price other tenants out of many family housing areas in major UK towns and cities, credit conditions post downturn have favoured landlord investors rather than less equity rich potential owner occupier buyers. ‘Local council coffers would also gain. We calculate that reinstating these student HMOs to homes for non student residents would boost council tax returns by around £1.5 million per town or city, since student only houses are council tax exempt,’ said Savills research analyst, Neal Hudson.”

All local authorities get increased Government funding to cover the cost of Council Tax exemptions for students, the local authority would not be better off if these properties were converted back to family homes, they would in fact be worse off because they would lose the additional “automatic” income and would have to recover it from the families who live there.

The one statement I do agree with in this article is this

“Article 4 of the Town and Country Planning Act proposes restricting new HMO supply which could push students and associated landlord demand into smaller properties, pricing out other occupier and tenant groups.”

I also talked about this in my book because Article 4 Directions are ill-conceived and, in my opinion, will soon sigh and die.

Finally the article says

“For the institutional investor in student housing the UK market offers a mature, counter cyclical investment opportunity”.

Wrong again, I have given a lot of evidence in my book that shows how the student market will continue to recede in all but the Red Brick university areas, many of those are already building campi in the most popular sending countries, and many investors will catch a cold by investing in purpose built student blocks in the next few years.

I am struggling to understand why investors are not being encouraged to put their cash into funds to build more family homes, since we all agree that this is an area of increasing demand and it is very unlikely that the demand will do anything other than grow year on year?

Am I missing something, do Savills know something that I don’t know?

Follow me on Twitter @landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337


Buy to let rents still rising and unlikely to fall Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Market News, Property News

Rents are still rising and are unlikely to drop anytime soon, according to one of the UK’s leading letting agents.

Average rents in England and Wales edged up by 0.4% in May to £712 a month in May – increasing for the second month in a row as the market settled after the end of the stamp duty holiday for first time buyers in March. Continue reading Buy to let rents still rising and unlikely to fall


Mortgage famine fuels buy to let rent rises Buy to Let News, Latest Articles, Mortgage News

Rent rises are fuelled by a mortgage famine that is forcing home owners that cannot sell to become reluctant landlords who have to rent themselves to move on.

The latest lettings survey by the Royal Institution of Chartered Surveyors (RICS) shows rents have followed an increasing trend since 2009. Continue reading Mortgage famine fuels buy to let rent rises


Buy to let did boom in 2011 – it’s official! Buy to Let News, Latest Articles, Lettings & Management, Property Investment News, Property Market News

Buy to let really did boom in 2011 – with the total up 12% on the previous year as 692,766 homes were rented out.

As buy to let rampaged to a new high, home sales dropped back by 12,000 in the year to 769,077.
The trend was for buy to let to increase each quarter through the year – with the third quarter showing the biggest rise of 14.46%. Continue reading Buy to let did boom in 2011 – it’s official!


Number of tenants in arrears surges 20% in a year Buy to Let News, Latest Articles, Lettings & Management, Property Market News, Tenant Eviction

Thousands of tenants are in rent arrears with a growing number adding to the total every month, according to statistics from rent receivers.

Almost 95,000 tenants were at least two months behind with their rents in the quarter ending March 31 – an increase of 20% compared with 12 months ago and a 10.2% on the last three months of 2011, says Templeton LPA. Continue reading Number of tenants in arrears surges 20% in a year


London rents hit almost double the rest of the UK Buy to Let News, Latest Articles, Property Market News

Buy to let landlords are picking up almost double the average monthly rent in London compared to property investors in the rest of the UK.

Average monthly rents in the capital are £1,212 a month, according to landlord mortgage firm BM Solutions.
That’s 69% more than the UK average of £716 and 41% higher than the second-placed South East (£858).
Wales (£474 per month) has the lowest average monthly rent, followed by the North and Yorkshire and the Humber (both £488 per month). Continue reading London rents hit almost double the rest of the UK


Rents are cooling – but tenants still expect to pay more Buy to Let News, Latest Articles, Property Market News

Buy to let rent increases are slowing down – but 60% of tenants still expect to pay more to landlords by the end of the year.

More than 70% believe the current letting market favours landlords, while 55% of tenants say they are ‘trapped renters’ who would like to buy but can’t afford a home, according to online property portal Rightmove. Continue reading Rents are cooling – but tenants still expect to pay more


Buy to let rents are still rising, say letting agents Buy to Let News, Latest Articles

Rents are still rising – but at a much slower rate than a year ago, according to a study from one of the UK’s largest letting agents.

Average rents in England and Wales nudged up 0.01% to £712 a month in January – the first time rents have risen in January and the first monthly rise for three months, says LSL Property Services.

The firm, which runs letting agents Your Move and Reeds Rains, says rent inflation for 2011 was 4% or a £30 rise over the year. Continue reading Buy to let rents are still rising, say letting agents


Letting Agent Signs up 685 New Would-be Tenants Every Day Buy to Let News, Latest Articles, Lettings & Management, Property Investment News, Property Market News

About 500,000 new tenants have registered to rent buy to let homes over the past two years with just one network of national letting agents.

Over 275,000 signed up in 2011 – an increase of 53,000 (24%) over the 222,000 who were desperately seeking to rent a home in 2010. Continue reading Letting Agent Signs up 685 New Would-be Tenants Every Day


Rents are Lower than Most Landlords Believe, Claims Belvoir Buy to Let News, Latest Articles, Lettings & Management, Property Market News

Too many self-interest groups are inflating the real rents buy to let landlords are picking up, claims letting specialist Belvoir.

Data and interpretations are out of step with reality because most of the claims are from operators around London, where rents are much higher than elsewhere.

Belvoir – which has 140 nationwide offices – has reviewed letting data from the past four years and reckons rents in most areas are no higher than they were in 2008, although headline averages make them look much higher. Continue reading Rents are Lower than Most Landlords Believe, Claims Belvoir


Property Forum and News website where UK landlords and letting agents share best practice