A property management firm says the dramatic slump in overseas student numbers in London should be seen as an opportunity for landlords to “refine” their tenant base.
The Prime London company says the central London rental market for new and modern builds in Q3 2024 has experienced a significant shift.
It suggests that while recent changes in UK student visa regulations have led to a slump in international student numbers – a 40% decrease in visa applications, with a 55% reduction in postgraduate students – this is an opportunity to landlords.
It says they should instead shift to move to solely professional and corporate leases, a shift which is claims “has already shown more promising returns.”
Byron Dixon, head of valuations at Prime London, says: “Across the more than £1 billion of properties managed by Prime London, our annual Return on Property Lettings analysis consistently highlights that for High Net Worth tenancies (those individually paying over £1,000 per week) professional and company lets offer an average return 8% above those of student lets, even if the headline ‘per week’ price is less.
“This is due to the stability, lack of void periods and repairs, and higher quality, longer-term tenancies.
“As a result, using our analysis, we are witnessing a shift in demand with our clients towards professionals and corporations, who prioritise well-maintained, modern properties for long-term commitments.”
He continues: “This evolution presents a prime opportunity for landlords to refine their tenant base, focusing on secure, higher-yield leases that have proven resilient. The market’s price sensitivity is currently favouring tenants, with ample choice at competitive prices, creating a balanced market landscape.
“However, as the UK economic strategy becomes clearer, and global factors such as the US election come into play, we anticipate a potential recalibration in market dynamics.”
This article is taken from Landlord Today