After a lifetime with the parents, students naturally want to let their hair down before the serious study starts, and that is why they are a risky tenant population. But that is not the primary reason why a growing number of buy-to-let landlords are rejecting student tenants.
Increasing household debt, poor credit history and rising rents, which leave many students looking for a guarantor to ensure that they can pay their rent, largely explains why an increasing volume of landlords deem students to be high risk tenants, and why many are now turning them down for rental accommodation, according to new research.
A new study, undertaken by Housing Hand, shows that over the last quarter, there has been a 76% year-on-year increase in the number of students and young professionals applying for a UK guarantor.
Further findings reveal that the average deposit for student or young professional accommodation is rising, with property in London by far the most expensive, at an average of £1,044.
Based on an average monthly rent of £696 per calendar month across the UK, Housing Hand estimate that potential tenants without a UK guarantor would have to find £5,220 to cover the deposit and six month’s rent, before stumping up student fees to go to university.
Jeremy Robinson, managing director of Housing Hand, said: “Students and young professionals are struggling to secure rental accommodation as they are failing credit checks. It is understandable that letting agents and landlords have a big concern around rent arrears and many just don’t want to take the risk.”
Housing Hand aims to mitigate all the risks for landlords and letting agents by becoming the potential tenant’s guarantor, and provide tenants who have failed a credit check with guarantor liability insurance policy, which Robinson says “ensures that the rent payments are paid in the event of the tenant defaulting on the rent”.
He added: “Landlords and letting agents who are partnered with us have been able to increase occupancy, due to larger pool of applicants that can now qualify and they have been able to eliminate the risk of rent loss, due to tenant default, at no cost to them.
“Currently, we stand as guarantor for tenants from 141 countries and have had over 50,000 happy applicants. We help international students, graduating university students, professional school students entering the workforce, employed UK nationals and non-UK nationals, self-employed persons and UK students with responsible parties to secure rental accommodation.”