Almost three-quarters (72%) of students move away from home so that they can enjoy the full university experience and learn to live independently. But the worsening cost of living challenges around food, energy and rental prices are making many reassess that choice. The result is that 60% of students have considered moving out of their student accommodation in order to save money.
This situation is causing significant challenges for the landlords who provide properties for student rental. With energy costs and interest rates continuing to rise, it makes sense that rental rates would also increase. But when your prospective tenants are students, raising the asking price could reduce interest and risk the property remaining empty as students opt for cheaper alternatives. This is especially concerning as specialist insurance broker Adrian Flux estimates that being unable to collect rent on unoccupied properties could result in UK landlords collectively missing out on a total of £320 million.
What is required is for landlords to understand the concerns of students and consider what they can do to relieve these concerns.
Adrian Flux has surveyed 1,000 students to identify which factors are most likely to be considered when assessing the finances of a new property and the type of incentives they would like to see.
With this insight, student landlords will have a better idea of the physical property and rental agreement improvements required to make their property an attractive option for students despite overarching financial pressures.
What concerns student renters the most?
When surveyed, 66% of students revealed that utility bills were their biggest cost consideration, compared to 40% who said paying for food. Both of these factors, alongside the actual cost of renting itself, suggests that the cost of living crisis is having a dramatic impact on students and their decision-making.
What can landlords do to make their properties more attractive to students?
By looking at the concerns and preferences of students, landlords can build a better understanding of the motivations of their potential tenants. The following tips will help to incentivise your property over competing rental options:
Be flexible on finances
Beyond simply offering lower rental rates, the findings suggest that providing opportunities for discounts/cashback would have the most significant impact.
The perk of being able to save or reclaim some money could be a deciding factor that encourages new students to rent your property or convinces existing tenants to stay in the property rather than choosing somewhere else to live for the next year.
Offering all-inclusive bills adds a level of certainty for student tenants as they will know exactly how much their outgoings will be each month, making budgeting much simpler.
Flexibility within the rental agreement
A student’s circumstance can change dramatically in a short space of time and so giving the impression of ‘locking in’ to a long-term agreement could be off-putting.
Requiring low or no deposit is a great way to make your property more attractive. Similarly, increasing flexibility to end the tenancy early will provide another reassurance to potential tenants.
Help to keep energy costs down
Some 66% of students are anticipating high utility bills, so offering a property that is energy efficient would be attractive from personal, practical, financial and environmental perspectives. Adding features such as double glazing and insulation can go a long way to making a property more energy efficient and reducing energy bills for the occupant. Similarly, fitting solar panels could help to offset energy costs by accounting for a portion of the property’s electricity consumption.
Taking this type of measure reflects positively on the landlord, as it shows proactivity and consideration for the condition of the property and the welfare of tenants – as well as concern for the environment. For a moderate outlay, these improvements could both attract interest and help to justify higher rental prices.
Offer understanding and support
The most effective way for landlords to attract and retain student tenants is to demonstrate an understanding of their circumstances by providing flexibility and reassurance when determining how to set rent and which benefits to offer.
Chelsea Shakespeare, a manager within the household team at Adrian Flux, says: “Landlords can reassure tenants amidst the financial uncertainty by making sure their tenants know where the financial responsibility lies, and that they (landlords) have adequate insurance, as well as inform students what happens if there is an emergency. This will alleviate any concerns around related unexpected costs that might arise during a tenancy so students can budget accordingly.
And in case of the worst, we recommend landlords review their policies and consider cover for all eventualities including rent guarantee, unoccupied periods (such as during change of tenancy and half terms), and legal expenses should disputes arise.”
Get a landlord insurance quote instantly
Adrian Flux Home is one of only a few specialist home insurance brokers in the UK offering a full range of insurance cover to landlords, including for a student let. For a hassle-free quote, give us a call on 0800 081 0777 or request a callback at a time that suits you.