Student property has long been one of the most lucrative investments available to landlords, with sky-high double-digit yields typically available in many parts of the country.
But the departure of thousands of students from UK universities and colleges back to their parental homes has led to concern from landlords and letting agents.
Some student tenants seem to think that they are no longer liable to pay rent on their accommodation, and this could see many landlords running into debt.
Giles Inman, business development manager at the East Midlands Property Owners Group, which represents around 600 landlords in the city, told the Nottingham Post: “We are getting students contacting landlords saying they are moving back to their parental homes and some of the students are saying ‘do they need to pay any more rent?
“A tenancy agreement is a legal contract. If the landlord pursues the student, well, we do not want to go down that road. It is all about being in it together.”
Marcus Askam-Yates, director of Student Housing, which has offices in Lincoln and Nottingham, is urging landlords to remain calm despite many students deciding to leave their rented accommodation and return to their parents.
He points out that the government is still continuing to issue student loans, and so there is no reason for tenants attending university not to pay their rent.
Askam-Yates said: “I guess we, like a lot of agencies and have had several phone calls and emails from concerned landlords, worried that their rental income will decline during the current situation.
“We have reassured them that as all tenants have signed legally binding contracts with us. Students are still able to live in their homes properties as normal, without additional risk. The government has advised against non-essential travel, and so many of our tenants have stayed in their accommodation.
“Of course, the tenancy does not require the tenant to physically reside within the property, and it is their right to vacate their rented property, but the tenancy agreement remains unaffected. Landlords have to keep to their obligations under the tenancy, and it’s expected that tenants will adhere to their obligations too.”
Askam-Yates continued: “We have had several students ring us about what happens to their rent if they decide to leave their home temporarily and if a discount will be issued if they no longer live at the property. Most universities are still offering online or remote learning and Student Finance has confirmed that tuition and maintenance loan payments will continue to be issued, so the vast majority of our tenants understand that they need to continue to pay rent in line with the tenancy.
“As all student tenants are still expected to pay rent, the vast majority of landlords will see no changes to rental income and should have no issues paying mortgages each month.
“We understand that some students use their part-time jobs to top up the loan payment in order to pay their rent. In these circumstances, we’re asking guarantors to step in and provide rent guarantees or offering deferred payment plans to the tenants as the response to the pandemic unfolds.”
“Tenants suffering financially as a result of COVID-19 should contact their agent for a payment plan as soon as possible.”