Tag Archives: Student Tenants

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


Deposit Deadline of May 15th in Scotland Landlord News, Latest Articles, Property News

Scotland-flagLandlords in Scotland are urged to beat the deposit deadline and avoid huge penalties.

Over half of deposits for private tenancies in Scotland may not yet have been paid into a legally required tenancy deposit protection scheme – with just one week to go until the final deadline to sign up.

SafeDeposits Scotland, the leading provider of the tenancy deposit scheme in Scotland, says based on the latest figures as many as 56% of tenancies eligible for taking a deposit may not have yet had their deposits paid into a scheme.

According to the latest Scottish Government figures up to the end of March there are only 129,164 deposits submitted to a scheme – but there are 291,190 properties across Scotland signed up for landlord registration. (1)

From May 15 all deposits from privately rented properties must be secured into one of three government approved tenancy deposits protection schemes in Scotland, as part of the Tenancy Deposit Schemes (Scotland) Regulations 2011. The legislation has been phased in and May 15 is the final deadline for all properties. (2)

Glasgow based SafeDeposits Scotland, the Scottish Association of Landlords and the National Union of Students are now issuing a call to urge landlords to ensure they are signed up before the deadline to avoid facing financial penalties.

Director of Operations at SafeDeposits Scotland, Rebecca Johnston said, “These figures are to the end of March and while we would like to report a massive surge in the last month of landlords signing up to the scheme that hasn’t happened. We want landlords to know that we are here to guide them through this process. But there isn’t much time left. They must sign up to a scheme – or risk a financial penalty. No-one wants that.”

John Blackwood from Scottish Association of Landlords said, “While not all landlords will charge a deposit and more deposits may have been protected since the last count, the estimated figures paint a worrying picture about the potential number of properties not signed up.”

Robin Parker, President of NUS Scotland, said, “These statistics seem to indicate that many landlords have yet to sign up to tenancy deposit schemes, which will be a surprise to student tenants who are expecting to hear shortly from the schemes how much of their deposit they are due back. Landlords are liable for huge penalties if they don’t submit their tenants deposits to a scheme, and we would urge them to beat the deadline and sign up. We also urge student tenants to get in touch with their landlords to confirm they are aware of the deadline and signed up to a scheme.”


BuytoLet Lender BM Solutions allows Student and Benefits tenants Buy to Let News, Landlord News, Latest Articles, Property News

BMSBM Solutions relaxes its BuytoLet lending criteria to allow landlords to rent to students and benefit claimants

It was recently reported that BM Solutions was looking at changes to its BuytoLet underwriting criteria and the rumors were that they would be looking to remove its £25,000 minimum income requirement.

The initial reaction by some market commentators was that to remove the £25k minimum income would lead to the door being opened to low income households who are more at risk of defaulting, albeit that it could open the door to buyers outside of London, and would be of particular help for self-employed clients.

Another rumored criteria change was regarding the Lloyds restriction on its BuytoLet criteria which only allows a maximum of three buy-to-let properties per customer, across the whole of the Lloyds Banking Group (which now includes major lending brands such as BM Solutions, Halifax, C&G).

So, what has changed? How have BM Solutions relaxed their criteria? Previously, the lender’s list of exclusions included student lets, tenants claiming housing benefit, rent rebates or rent allowance, asylum seekers and tenants benefiting from diplomatic immunity.

With immediate effect BM Solutions has now adjusted its criteria to allow BuytoLet landlords to rent properties to students and benefit claimants. They are also now willing to offer loans on properties with a maximum of five occupants, a stipulation attached to all properties, although BM Solutions has never lent on House of Multiple Occupation, where tenants sign individual tenancy agreements and this still hasn’t changed.

This news comes just over a week after The Mortgage Works has also in dropped its restriction on lending to landlords with tenants who are on housing benefits.

Other lenders which will lend to landlords with student tenants include The Mortgage Works, Godiva, Abbey for Intermediaries, Woolwich, Aldermore and Virgin Money.

Howard Reuben, Principal of H D Consultants says that these most recent criteria changes are testimony that Lloyds is pursuing more business. He says “This criteria update appears to back up the news that BM Solutions is looking increase business via criteria rather than chasing the rate. This is a controlled measure which will provide some relief to a number of landlords”

From 19th March, BM Solutions has announced new semi-exclusive products starting at 3.89% up to 75% LTV available for purchase and remortgage, and which also benefits from a £500 cashback too.

To discuss any Buy-to-Let deal with our preferred broker please call us on 01603 489118 or email info@property118.com

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Tackle immigration but not at the expense of international students Landlord News, Latest Articles, Property Investment News, Property News

Last week’s release of the Census data has revealed the extent of the immigrant population in London. People classifying themselves as ‘White Britons’ are now a minority in the capital, making up just 45% of the population. Whilst the Government needs to address the issue of immigration, they must avoid implementing blanket policies which catch genuine ‘contributors’ to the economy and society in general. Continue reading Tackle immigration but not at the expense of international students


Increasing the rental market appeal of your student property Buy to Let News, HMO's & Student Lets, Landlord News, Latest Articles, Lettings & Management, Property News

Recently it was revealed that 15,000 fewer young people had applied for university places starting this academic year*. This reduction in student numbers will have a dual impact on landlords who traditionally let their properties in university towns.

ARLA’s advice to landlords operating in university towns and cities Continue reading Increasing the rental market appeal of your student property


Crooked landlord admits stealing student deposits Buy to Let News, Cautionary Tales, HMO's & Student Lets, Latest Articles

A university had to take on extra staff to deal with complaints about a landlord who stole deposits on student housing.

Detectives claim 18 theft charges admitted by Tariq Zaman, 42, at Leeds Crown Court were just a ‘representative view’ of the money he stole over several years letting houses in multiple occupation (HMOs) owned by him and his family in the city. Continue reading Crooked landlord admits stealing student deposits


Property dream collapses in £3m debt nightmare Buy to Let News, Latest Articles, Property Investment News

Road sign of collapsing houseA student landlord’s dreams of property riches collapsed in to a nightmare of £3 million in debts as he broke laws to run his letting business.

Daniel Eaton, 36, now has his portfolio of houses in multiple occupation (HMO) for sale to recoup some money – but he is £1 million short as his assets only total around £2 million. Continue reading Property dream collapses in £3m debt nightmare


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