Student accommodation is bucking the downward trend in the Scottish rental market by becoming the most sought-after properties for would-be tenants.
According to Edinburgh’s leading letting agent Braemore Property Management, student flats have become the hottest properties in the rental market, with some prospective tenants willing to sign up for a flat more than six months before moving in.
The firm, which manages more than 850 properties in Edinburgh, highlights that tens of thousands of undergraduates across Scotland are turning turn to the rental market every year in search of flats to live in during their studies.
This high level of demand, coupled with a traditional shortage of student properties in cities such as Edinburgh, has meant that student flats are proving to be immune to the rent falls that are currently being witnessed across other areas of the rental market.
And some lettings firms in Edinburgh are even refusing to put waiting lists up for student properties due to the high demand among undergraduates.
Scottish PR success for student properties
Colette Murphy, director at Braemore Property Management, said: “Student properties are remain very highly-sought after in Edinburgh. We rented out all of our student properties for the upcoming academic year before the start of the summer, but we could easily have let many, many more if we had them on our books.
“We don’t even put a waiting list up for properties because the response is so immense every year. There are some students who will start to ask in January about properties for their next academic year as they are desperate to get a good home in a desirable location in the city.
“We’ve seen rent falls across other parts of the rental market in recent months as there has been greater competition among landlords for tenants. However, student flats are definitely proving the exception to the rule, as these tenants are happy to pay a higher rent to secure a good property.”
Colette adds that student properties are also good buy-to-let investments, as students will pay between £325-£275 a month for a double room in a flat in a traditional student area such as the Southside or Marchmont, while double rooms in the New Town can fetch between £350-£350.
She added: “It’s a great investment to make, provided that you have a property in the right location and are happy to take a long-term view about being a landlord. Students are great tenants, as they’re willing to pay a good price for a flat in a traditional student area of the city, they’re happy to take long-term leases up to a year and they have UK-based guarantors.
“If you have a property in an area such as Newington, the Southside or Marchmont then it will prove popular with the student market. If it’s a three or four bed flat or house – and provided you have an HMO licence – you can expect to get anywhere between £325 and £450 per double room in rent every month, depending on the quality of the property and its location.
Buy to let market maintains Braemore’s PR in Scotland
“Of course, if you’re looking to enter the buy-to-let market, you have to have a very sizeable deposit behind you to make this sort of investment. It’s really only cash-rich investors who don’t want to put their money into the stock market or into savings that can afford to take a buy-to-let mortgage out on a property such as this.
“However, for those people who have a property in these areas and are having trouble selling it, renting it to students could be the best move they can make. You can use the rent from students to cover some of your mortgage repayment while you look for another property to buy – and, when the market improves, you’ll then be able to sell your original home for a profit.”
The high demand for student properties has also been highlighted in the latest Citylets quarterly data report, which showed that these properties were bucking the downward trend in rents that had been witnessed across the rest of the market.
Areas such as Marchmont are already seeing a surge of activity in terms of property enquiries and sales, with investors looking to take advantage of the demand for good homes among students and young professionals.
Scott Brown, estate agency partner at Warners solicitors and estate agents, said: “There’s a lot more activity happening in areas such as Marchmont these days, which is a very encouraging sign. Properties are not only proving popular with people looking to live in the area themselves, but also from savvy investors who are seeing the potential of purchasing a buy-to-let flat for young professionals or students.
“We had a sale in Marchmont recently where we set a closing date and received six offers for the property. The final price paid was well in excess of the valuation and original asking price, which is a scenario that just would not have happened six months ago. It’s a very positive sign for traditionally student-friendly areas of Edinburgh, but also for the rest of the city’s property market.”