Renting to Students in Central London: Complete Guide

Renting to undergraduates and post-graduates can be an excellent option for many landlords. Is it too good to be true? Let’s find out.

In university towns and cities like London, the demand for student accommodation is high and rental periods are long. As a result, landlords who let to students can expect some of the best yields compared to other tenants.

You can find campuses on your property’s doorstep in Marylebone and Baker Street, near Fitzrovia and Mayfair, and close to the ever-popular Camden and Soho. The leafy village communities of Primrose Hill and St John’s Wood are just a short distance from university buildings and trendy destinations by public transport. But there’s more to successful student lets than a great location – make sure you know what you’re in for before you commit.

Read on to find out everything you need to know before you rent to students in the UK.

Pros And Cons Of Letting To Students

Advantages Of Letting To Students

• Your property doesn’t need to be perfect – you may spend less on furnishings and save yourself worrying about tenants liking the décor, furniture and fittings etc.
• Consistent demand – demand in student areas is high, so there’s no shortage of tenants. Regardless of economic conditions or recession, students will always need somewhere to live.
• Undergraduates are predictable – they typically rent for 12-month periods, so you won’t have to wait years to get your property back if you want to sell, move on, or redecorate.
• Competency – students are generally switched on and intelligent, so issues can easily be resolved. It also means they will be familiar with using technology for collecting the rent and contacting you in the event of a repair needed etc.
• Financial reassurance – many students come with guarantors (usually their parents or a close family friend), so missed rent payments are less of a risk. And if there is one, the guarantor usually resolves the situation ASAP since the debt becomes their responsibility.
• Steady yield – many landlords find letting to students gives them a steady rental yield.

Disadvantages Of Letting To Students

• Students expect a fully furnished property – this creates more work for landlords in upkeep and maintenance.
• More wear and tear – you may find yourself paying to repaint the property each year and replace the odd item of furniture, such as a table or even a bed and mattress. First time renters, such as students, do not always look after the property as well as established families.
• Lack of budgeting skills – students are notoriously bad with money, so missed rental payments are possible unless you get a guarantor. Here at Kubie Gold, we highly recommend it.
• Void periods over the summer holiday – depending on the contract period, the property could be vacant for several months.
• Competing with halls of residence – universities and private companies are increasingly ‘upping their game’ when it comes to supplying accommodation for undergraduates in years two, three and four. Private halls of residence can cost more but they’re extremely popular with overseas students, with the offer of en-suite bathrooms, games room, a restaurant, movie room etc.

What Type Of Rental Do Undergraduates Look For?

After spending their first year in halls of residence, most students choose to rent privately for their remaining time at university. This may be renting a room in a house where each room is rented separately or renting a house with a group of friends. Undergraduates usually value a central location with easy access to local entertainment venues. Whereas, postgraduate students are seeking quieter surroundings.

Which Properties Are Suitable For Students?

Since students often rent with friends, look for properties with at least 3 to 4 bedrooms. Good transport links are essential – short walking distance to a university campus is even better. Student tenants will be spending time in their rooms throughout the day, so look for properties with spacious double bedrooms if possible.

Want to know more?  Read about checking a tenant’s right to rent, discover certificates landlords need to keep and explore our guide to improving your EPC rating on London property.

Ideally, What Should Student Housing Include?

The perfect student housing offers enough personal space, shared space, and facilities – with good WiFi too, as they’ll need it to study. Additional bathrooms, or even just an extra WC, can add to the appeal, and a garden is an advantage too. Carpeting the halls and landings can help to stop noise travelling as much. Fitting easily cleaned laminate flooring or tiles in the bathroom and kitchen can help with upkeep, and it’s easy to replace.

When Is The Best Time To Market My Property To Students?

The search to rent student accommodation often begins up to 8 or 9 months ahead of the new academic year. Most UK universities’ academic year runs from August to September, so you could start advertising as early as January or February. According to UCAS, some students are starting their property search as early as November.

How Do I Market My Property To Students?

Find a letting agent to market your student rental property locally, on property portals, and with the university. Your letting agents should list your property on leading online platforms such as Rightmove and Zoopla. Good photos will help you stand out from other student housing – and you should promote features that appeal to students in the listing. If your property has good proximity to the university campus and popular local venues, an up-to-date kitchen or ensuites, shout about it!

What’s The Best Way To Find Students Looking To Rent?

A great way to find students looking for accommodation is to contact universities. Or rather, secure a letting agent with the right contacts. Most universities publish a list of approved landlords to which you can ask to be added. This often involves a few checks on the university’s part, but it means you can advertise your student property directly to the target market.

Good letting agents like Kubie Gold will have a relationship with universities and be able to help you with this.

What’s The Best Way To Secure My Monthly Rent?

Many students are moving from their family home, so they’re unlikely to have an established credit history. They may not have a regular income either. To ensure the rent is paid monthly, ask for a guarantor (usually the student’s parent or guardian.) Alternatively, you can ask for rent upfront.

How Do I Protect My Income?

Three common ways to protect your monthly rental income on student accommodation are:

1. Insist on a guarantor – If your tenant can’t pay their rent on a particular month, the guarantor is expected to cover the amount.
2. Ask for rent paid upfront – Students who receive loans and grants may be happy to pay in advance.
3. Consider landlord insurance policies – Look for policies that cover you for unpaid rent in case your tenants stop paying.

What About Renting To International Students?

There are systems in place to check their suitability, so don’t rule out renting to international students without doing your research. Right to Rent checks will confirm that international students are allowed to stay in the UK. Though you may have other concerns – for example, it can be harder to take legal action if they fall into rent arrears.

In practice, international students don’t want to jeopardise their studies by causing trouble or losing their place to stay, so they tend to be reliable. While international students may have a harder time supplying a UK-based guarantor, they may have access to a university guarantor scheme. For additional protection, landlords can request six months’ rent in a lump sum in advance.

How Should I Furnish Student Property?

The type of items that your tenants will look for in their accommodation include:

• Appliances – A freezer, fridge and cooker are pretty much standard, along with a washing machine and a dishwasher. Landlords should also supply a microwave, toaster and kettle along with a vacuum cleaner, and a lawnmower if there’s a garden. Ensure that all appliances are easy to use and in good working order.
• Furniture – Individual bedrooms should be equipped with a bed, wardrobe, drawers, desk, and chair. Students will work from home, so a desk in each room is vital. The communal sitting area should have sufficient sofas for all the tenants.
• Soft Furnishings – Landlords should supply carpets, curtains and lampshades and ensure these are clean at the beginning of each tenancy.
• TV – Although a TV is not a necessity when letting to students, they often appreciate one, so it can be good for landlords to provide one. Prices for HD flatscreen TVs are not excessive, and students will be willing to pay a little extra for this.
• Broadband and Wi-Fi – Fast broadband and Wi-Fi throughout the property are essential for student accommodation.

Is There Any Special Legislation To Consider?

When renting to students, all the normal landlord responsibilities apply, including gas and electrical safety, fire safety and deposit protection. The Right to Rent legislation requires landlords to verify that all tenants can legally live in the UK. Remember, it is against the law to only check people you think are not British citizens.

HMO Licenses For Student Houses

You’ll likely be renting student accommodation to several occupants who are not from the same family group. If you’re renting to students in the UK, you may need to apply for a Houses in Multiple Occupations (HMOs) license.

As a simple rule of thumb, your property may be an HMO if:

• At least three tenants live there comprising more than one household (even if they are all friends and occupy the property on a single tenancy)
• Toilet, bathroom or kitchen facilities are shared

An HMO requires a mandatory license if it is a large HMO, one occupied by five or more people. The Housing Act 2004 allows local authorities to introduce licensing for smaller HMOs. Check with your local council regarding what licenses are required.

As a landlord of an HMO, you will be required to make sure that:

• The house is suitable for the number of occupants (this depends on its size and facilities)
• An engineer carries out a safety check of the electrical appliances every five years and be able to provide safety certificates when requested
• You send the council an updated gas safety certificate every year
• You install smoke detectors
• The council may add other conditions to your licence regarding your facilities’ standards. They will let you know when you apply.

If you have an HMO but fail to apply for a license you face a fine of up to £30,000 per property.

Want to know more?  You can also read about how to increase rental income, discover tips on how to become a landlord in Central London and explore buy to let guide for Central London.

Tenancy Agreement for Students

Most student landlords rent their property on a joint tenancy. This means that all the students in the house are equally responsible for paying the rent and looking after the property. If one tenant doesn’t pay the rent, you can expect the other tenants to make up the shortfall. If a tenant leaves before the tenancy is up, it is up to the remaining tenants to find a replacement – a new tenancy agreement will need to be signed.

If you rent out each bedroom individually, you must ask each tenant to sign individual tenancy agreements. In this case, you will be responsible for finding replacement tenants if someone drops out.

Tips For Renting To Students

There’s a lot to think about when renting to students – if you decide to go ahead, here are our hints and tips:

• Don’t spend a fortune on furnishings – You can buy cheap and cheerful from shops like Ikea and Argos.
• Local licensing policies – Before renting to students, check with the council whether you require a licence.
• Tell your insurance company – If you have a landlord insurance policy, you’ll need to state that your tenants are students. You might even have to purchase a different insurance policy for renting to students, to ensure any future claims are valid.
• Buildings insurance – The structure of your property should be covered under a separate buildings insurance policy.
• Your insurance doesn’t cover tenants’ belongings – Landlord’s contents insurance can only cover furniture and fittings that belong to you. Remind your tenants that if they want to protect their own belongings (for example, their computers), they will need to take out their own contents insurance policies.
• Students are exempt from council tax – They don’t have to pay council tax, but they must get an exemption certificate from the council as evidence. Your tenants need to show you, the landlord, so you can prove that your property was let exclusively to students. Failing to do so may make you liable to pay outstanding council tax.
• Make payments simple – Consider offering rent all-inclusive of bills to appeal to student tenants.
• Get a guarantor – Ask students to provide a guarantor.
• Take a thorough inventory – Student property can be prone to damage, and you’ll need evidence in case you have to claim back money from the deposit.
• Consider the type of students – How much damage your flat suffers from can depend on who you rent to. For instance, rent your property to a bunch of 20-year-olds in the football or rugby team, and you can be sure there will be plenty of parties. We’re not saying don’t rent to active young men– just be prepared when doing that final inventory.
• Include a ‘parties are out’ clause – Put this in the tenancy agreement to dissuade tenants. This doesn’t mean they won’t happen, but they might not be as boisterous as they might have been had that clause not been inserted.

And Finally

Kubie Gold can help you find student tenants and manage the whole let- whether you’re a landlord in Camden, Fitzrovia, Mayfair, Primrose Hill or beyond. We can even advise you on the best properties to purchase if you are taking your first steps into student lets. Contact us today to talk it over.