Tag Archives: Rental market

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?

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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


Estate agent secretly tried to let home he should have sold Buy to Let News, Cautionary Tales, Landlord News, Latest Articles, Property News

An estate agent tried to make some money on the side by renting an empty home he was trying to sell.

Your Move sales consultant Daniel Morriss, 25, advertised the two-bed house to let online as a furnished let for £500 per month without telling the owner. Continue reading Estate agent secretly tried to let home he should have sold


More surveys confirm North/South property divide Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Market News, Property News

Buy to let rents slipped back 4.3% to an average £919 a month in May, according to letting agents haart.

Average rents across the country fell, but slightly increased across the UK when excluding London – by around 0.7% to an average £791. Continue reading More surveys confirm North/South property divide


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 rents keep rising as tenants get poorer Buy to Let News, Latest Articles, Lettings & Management

The average UK rent increased by 2.6% in March to £764 a month, according to the latest survey by specialist landlord insurers Homelet.

London rents are still defying gravity and average £1,156 a month. Continue reading Buy to let rents keep rising as tenants get poorer


UK split into “London” and “the rest” rent divide Buy to Let News, Latest Articles, Property Market News

The great rental divide is splitting the UK as tenants in London pay double the amount for a comparable property elsewhere.

New research shows two distinct rental markets – the capital and the rest. According to property analysts Hometrack. Continue reading UK split into “London” and “the rest” rent divide


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!


Landlords face tougher deposit protection rules Buy to Let News, Latest Articles, Lettings & Management, Property Market News

Landlords failing to protect a tenants buy to let deposit face tougher penalties under new laws that come in to force from April 6, 2012.

The government has closed holes in the tenancy deposit protection schemes after a number of high profile court cases slated the current rules as poorly drafted and impossible to police. Continue reading Landlords face tougher deposit protection rules


Landlords warned to be insured against arrears Buy to Let News, Latest Articles, Lettings & Management, Property Investment News, Property Market News, Tenant Eviction

With rents still continuing to rise, insurance provider LetRisks is urging to buy to let landlords to ensure they are in a position to cope with rising arrears and evictions.

All figures relating to arrears and evictions appear to be the rise. The number of tenants with two months or more arrears increased by 11,400 in the space of a year according to the latest Tenant Arrears Tracker by Templeton LPA and evictions in the last quarter of 2011 went up 11% compared to the last year too. Continue reading Landlords warned to be insured against arrears


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