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Mature students fuelling student property demand

The current state of the jobs market is fuelling demand for student rental property as applications from older individuals wanting to attend university increase.

According to Paragon Mortgages, there has been a 12.9 per cent increase in applications from the 21 and above group to attend university in the 2009/10 academic year; overall, 464,167 more individuals have applied for university for the coming year.

Paragon managing director John Heron says: “If individuals have been made redundant or are struggling to get a job they may see higher education as an attractive option. That could explain the increase in older applicants for the 2009 academic year.

“This increase in demand is not only good news for landlords that focus on the student lettings market, but also potentially landlords in the wider vicinity of the university. As universities expand, demand for good quality accommodation also increases, which should filter through to rental income. More mature students may also be prepared to travel further to get to university, so may look to rent property away from the main student locations, therefore boosting demand more generally.

“Although figures are currently unavailable, I’d also expect an increase in the number of mature students applying for postgraduate courses as students look to develop their knowledge further and present the best CV they can to employers.”

Paragon says student landlords typically have lower void periods than the wider buy-to-let market, with the benefit of an annual let and frequently a parental guarantee. Rental income per property also tends to be higher as landlords typically let to students on a per-room basis.

The lender’s research reveals that average yields of landlords that hold student property in their portfolios is 7.2 per cent compared to 6.2 per cent of those whose portfolios do not consist of any student property.


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