26^th Jul 2020

A student buy-to-let investment specialist group warns that like most sectors, there is and will be a hugely damaging effect caused by the pandemic for BTL investors.

It says that many prospective students may take a year off because of the virus, before beginning their degrees and others may prefer to study at home, which will have a major effect on rental incomes.

However this is not the only problem for investors to be concerned about as there are new tougher health-and safety legislation to comply with, as well as other rule changes on tenancies.

Student landlords are currently able to give their tenants a fixed-term Section 21 tenancy, and at the end of the term are able to let the property out to new students.

However when not if, the government scraps Section 21 landlords will have to become reliant on a Section 8 notice if tenants fall into arrears. Section 8 notices are far easier to fight against eviction than Section 21s.

Mish Liyanage, managing director of the group, said: “Student landlords are facing a very tough few months and this is driving some of the smaller players to cut their losses and sell up.

“It is no surprise that many landlords providing student accommodation are deeply concerned with the viability of the market. Historically, they have enjoyed excellent yields and great occupancy, but now they are facing unprecedented times. The last thing they need is more legislation that will make it harder to let to students.

“Established student HMO property investors will be able to overcome these challenges and grow their portfolio further, while small time, or accidental landlords may be driven out of the market.”

Richard Merrick of PIMS, said: “Universities are well oiled commercial institutions which have a heavy reliance on student’s not only providing fees directly and indirectly.



News Archive »