Brexit, Brexit, Brexit – it’s the black cloud hanging above each and every industry as the government works to negotiate a deal with our European friends. From finance to education to housing, it’s clear that no corner will be left fully untouched - but while it’s certain the UK will be leaving, exactly how much of an impact the move will have is yet to be determined. One such example is the student rental market.
For both students and landlords, questions of cost, supply and demand, and the future of buy-to-let student properties remain unanswered. And while there are some people predicting the market will offer a bright place for student landlords, there are also those who fear instability.
In the short term at least, Brexit has had little impact on students renting, and bar a few small fluctuations, most predictions suggest the next two years will remain steady. European students will continue to pursue their studies here, and the market will stay – for all intents and purposes - stagnant.
Looking to the future
Britain continues to boast some of the world’s best universities, with six ranked in the top 25 globally, not to mention a great reputation for research and development facilities. However, a major worry has been that many students from EU countries who might have chosen to study here will no longer be able to afford the fees – and by consequence, other living expenses such as rent. Reclassed as ‘international students’, their tuition fees would essentially double in price.
The signs of doubt are already emerging, with UCAS figures showing the number of EU students applying for January 2017 courses down by 7.4%.However, it could be argued then that where we might see a drop in students from the EU, we'll see a rise instead in wealthier international students coming from further afield.
In some ways, that will help sustain the market for many years to come, ensiting that it remains lucrative for all would-be student landlords. But that may also throw some new challenges into the mix, such as costs.
If wealthier students with bigger budgets come in greater numbers, the quality of accommodation will naturally become a key area of focus – and with that comes higher rents. Not a problem for international students – but we could be at risk of out-pricing UK nationals. Coupled with ever-increasing tuition fees, there's a real risk that education will once more become a reserve of the rich.
That said, with the depreciation of the sterling, building in the UK has become a more attractive prospect. As such, there has been a huge surge in purpose-built student accommodation specifically targeted towards the international crowd. UK students meanwhile continue to opt for private rented housing - with that in mind, there should be enough choice in budgets and type of accommodation to cater to all needs.
One particularly interesting result of Brexit may also be a rise in UK national landlords. If lending options for those based overseas become more limited making it more difficult for international buyers to acquire UK property, we may well see more Brits take a chance on developing property portfolios. This is likely to foster stronger relationships if the landlord is on the ground and available to talk with tenants.
There are those who would say Brexit will have an overall negative impact on the student rental market, but I believe the greatest challenges that lie ahead are more reputational and class-oriented than economical. Moving forward, the opportunities are ready for the taking – we just need to be a little flexible.
Leon Ifayemi, CEO of SPCE.