A new study has revealed that Edinburgh is one of the top 5 most profitable UK cities for student landlords to invest in.
With the UK housing market continuing to grow and the rental sector booming, there are enticing opportunities in university towns for student landlords. Yet with 164 higher education options across the UK, which cities should landlords be looking to invest in?
We have worked with CIA Landlords to reveal The Best UK Cities for Student landlords. The student population of each city, the number of households and the average rent in student areas have all been analysed to find the most profitable opportunities for landlords.
EDINBURGH:
Edinburgh student landlords are making over £568,428,420 per year
Edinburgh rental prices cost students an average of £1,285 per month, the 5th most expensive in the UK.
Edinburgh has the 10th highest student population which accounts for over 15% of the city’s overall population.
UK general:
London student landlords are making over £2.6 billion a year in revenue.
Belfast was found to be the 2nd best city for student landlords to invest in the UK.
Reading, Derby and Luton were found to be the least profitable cities.
London has the highest rental prices averaging at £2,569 for students.
Oxford and Bristol follow after London for the highest average student rental charges (£1,788 and £1,544 per month respectively).
You can find the full study on the following link:
It was always on the cards that if restrictions were to be introduced on short-term letting in Scotland, Edinburgh would be first out of the blocks. And, sure enough, the council last month introduced a city-wide “control zone”.
The capital, which for obvious reasons is the country’s tourist Mecca, has become a magnet for Airbnb-style short-term lets over the last decade, leading to concerns about housing shortages and perceptions about anti-social behaviour.
Under draft proposals which will now go to Scottish Government Ministers for final approval, property owners will soon need planning permission to be able to operate short-term lettings and will have to apply for a change of use certificate from the planning department.
What is less well known is that the council has always had the power to require planning permission in the event of a material change in environment, such as short-term rentals. The difference is that, from now on, this will be mandatory.
It should be noted that the proposals only apply to secondary lettings, i.e., properties which are not an owner’s primary residence. People will still be able to let out their homes while on holiday, or rooms in their home while they remain in residence.
However, while the new restrictions appear to be forging ahead, it still remains unclear what policies the local authority will eventually apply. The current Development Plan – the overarching guide to future council thinking – makes no mention whatsoever of short-term lets.
Nor, surprisingly, does the document designed to replace it, the City Plan 2030, which again does not concern itself with the issue – making it increasingly difficult for property owners to plan ahead.
One can only speculate at the moment about whether permissions will be granted for continued short-term use, and on what grounds. Nor is there any clarity about whether numerical limits will be imposed.
Were there to be limits, it would be reasonable to assume that applications would be allocated on a first-come, first-served basis, so landlords hoping to remain in the market might be advised to act sooner, rather than later.
There is, of course, an existing provision in law whereby if a short-term let has been operating for more than 10 years, with no action against it by the council and no action to conceal its operation, then it is entitled to a Certificate of Lawfulness to continue operation, though necessary evidence will be required.
As of the start of this month, there have been nine applications so far this year for planning permissions for short-term lets, only two of which have been granted – and they both involved Certificates of Lawfulness.
What to do if applications fail is clearly now a matter of immediate concern for property owners and DM Hall’s specialist rural arm Baird Lumsden is currently embarked on an information campaign around the sales, letting and management options which remain open.
It has gone into the issue in depth, in anticipation that Highland Council will be the next authority to impose short-term let restrictions around the Badenoch and Strathspey area, and is reaching out to concerned parties.
Informed and impartial advice of this nature is something of a port in a storm for property owners who are caught between a rock and a hard place as the restriction net tightens.
There has been anecdotal evidence of landlords exiting the short-term market and moving to longer lets in the private rental sector. But regulation in this sphere of activity is getting stricter all the time, and the imminent New Deal for Tenants will do nothing to ease landlord pain.
On a superficial level, it is easy to understand the council’s hope that properties taken out of short-term lets will find their way back into the housing stock, thus easing ongoing shortages.
But a counter-argument, articulated by bodies such as the Association of Scotland’s Self-Caterers, is that lack of house-building is as much of a contributory factor to shortages, and that short-term lets bring in huge volumes of valuable tourism revenue to the city.
As things are, some smaller operators may indeed be forced to sell up and quit the market, although larger letting concerns will almost certainly continue to jump through the necessary hoops.
In this volatile environment, expert professional advice is the only real safeguard, and prudent property owners and landlords will seek it out as timeously as possible.
Calum Allmond is Head of Architectural Services at DM Hall Chartered Surveyors.
For further information, contact DM Hall Chartered Surveyors, 27 Canmore Street, Dunfermline KY12 7NU. T: 01383 621262. E: dunfermline@dmhall.co.uk.
Average annual UK rental growth* has reached a 13 year high, with rents increasing to £969 (+8.3%) in Q4 2021, up £62 per month since the start of the pandemic
The average rent now accounts for 37% of gross income for a single earner – up from a pandemic dip of 34% during most of 2021 but broadly in line with the 10-year average of 36%
Overall, average rents are up nearly 12% over the last five years
Demand for rental properties in January was 76% higher compared to the New Year market between 2018 and 2021
The stock of rental properties currently available across the UK is 39% lower than the five year average around this time of year
Inner city London has seen a rental growth of 11% compared to the same time last year -but the decline in rents during the pandemic means this has translated into an increase of just £18 per month in rent compared to March 2020
Average UK rents are tracking at almost £1000pcm – £62 more than at the start of the pandemic – against a backdrop of increased living costs squeezing households, reports Zoopla, the UK’s leading property portal, in its quarterly Rental Market Report.
UK rents squeeze disposable household income as cost of living rises
The UK’s average rental growth has reached a 13 year high, up 8.3% in Q4 2021, meaning households who agree new lets are now having to pay an additional average annual cost of £744, compared to the start of the pandemic (March 2020).
This increase means that a single earner can now expect to spend 37% of their gross income on rent, which is up from 34% during most of 2021. However, this now brings the figure broadly back in line with the longer term average of 36% as rental growth rises in line with wage growth.
Even with the current sharp rise, the overall increase in UK rents over the last five years totals 12% thanks to the decline in rents seen in some areas during the pandemic.
Rental market shrinks as demand creates fast-paced rental landscape
The New Year has seen heightened demand for rental properties, up +76% compared to the New Year markets between 2018 and 2021. Yet the supply of rental properties recorded in January 2022 in the UK is 39% below levels typically observed at the start of the year. This is creating competition in the market, with the imbalance of supply and demand ultimately spurring rental growth.
As a result, properties are being snapped up. In London, this means renters are having to move quickly to secure the perfect property with the time to let now averaging a fortnight, down from three weeks in late 2020.
This shrinking stock of homes for rent can be attributed to a continued decrease in buy-to-let investment over the last five years.. As rents rise, more renters will be choosing to stay in their properties, limiting stock turnover. With supply squeezed, it’s likely that continued demand will underpin more modest rental growth in the coming months, especially in city centres.
However, as the spike in demand falls back – hampered by the increases in household costs – it will reduce pressure on supply, ultimately driving more local competition to attract renters in local markets.
City centre rents continue upward growth trajectory
Pandemic trends saw strong growth in rental demand in wider commuter zones as renters embraced the ‘search for space’, but demand has now recovered across the central districts of all major cities including Birmingham, Edinburgh, Leeds and Manchester in a reversal of recent behaviour. This is largely driven by pent up demand from office workers, students, and international residents and investors who are looking for city centre living.
This is a normalisation of rental behaviour as demand once again rises in more central zones – seen most prominently in inner London with rental growth of 11% compared to the same time last year. But given the steep fall in London rents during the pandemic, this translates to an increase of just £18 per month in rent compared to March 2020.
Gráinne Gilmore, Head of Research, Zoopla, comments: “Rents have risen sharply in recent months, amid a backdrop of rising living costs. But it is important to point out that in terms of rental affordability, in most markets rents are still close to the 10-year average. As demand continues to outpace supply, there will be further upward pressure on rents, but affordability considerations will act as a brake on large rises.
“In addition, the January peak in rental demand will start to ease in the coming months, putting less severe pressure on supply, which will lead to more local market competition, and more modest rental increases.
“The flooding of rental demand back into city centres thanks to office workers, students and international demand returning to cities means the post-pandemic ‘recalibration’ of the rental market is well underway.”
James Evans, CEO at Douglas & Gordon, comments: “Since the beginning of the year, we have seen a clear trend of people coming back to London and the office. This has contributed to around a 40% increase in new lettings applicants compared to the same month last year.
“As there is also still a very restricted supply of properties, we’re seeing landlords achieve record prices, a high quality of tenant and almost no void periods. With competition for properties at the level it is, there are 35-40 new applicants for every rental property in London and around four offers received per agreed let, so tenants are having to put themselves in the best position possible to get the properties they want.
“Following a strong sales market in 2021, and more confidence in future price increases in London, we are seeing more buy to let investors entering the market. With some of the recent legislation changes, the need for a quality agent is even greater.”
The City of Edinburgh Council is reminding all city landlords and homeowners that every home in the Scotland must comply with new fire safety legislation which will come into force early next year.
As Edinburgh’s biggest social landlord, the Council is currently working with its contractors to fit new interlinked smoke and heat alarms, so that every one of its 20,000 Council-owned homes meets the new legislation and is made even more fire safe.
When this work’s done in each property, the electrical contractors will also undertake an Electrical Installation Condition Report (EICR) if one has not been carried out recently.
Older residents in particular are being asked to be aware of the new fire safety legislation.
The Council’sOlder People’s Champion, Councillor Catherine Fullerton, is calling on everyone who manages properties for older tenants in Edinburgh to make sure all new standards are met so everyone has the best chance of getting to safety in the event of a fire.
Cllr Fullerton said: “It’s absolutely vital that landlords and property management companies, particularly those that have a responsibility for older people within our communities, understand the new fire safety rules coming into force and act on them as quickly as possible. All properties, without exception, must be fitted with the new interlinking alarms, heat alarms and, where required, carbon monoxide detectors too.
“I’d also urge older people or people with older relatives who own their own homes to check out the Scottish Government’s dedicated ‘Fire safety for homeowners’ webpages for more details and, if necessary, to help them to get their homes fitted with the right kind of alarms. There is also clear guidance for private and social tenants as well as new build homes.
“I’d encourage everyone to be sure they are using a Trusted Tradesperson to change their fire alarms to meet the new law – please don’t run the risk of having faulty or non-compliant ones fitted.”
A ‘Trusted Trader’ in Edinburgh can be found by using this website:
If an older person is receiving Universal Credit, Edinburgh Care and Repair Service has been awarded funding from the Scottish Government to provide this service for free. If not, there will be a reasonable charge.
You can telephone for further advice on 0131 337 111 or email reception@cre.scot.
Cats Protection has welcomed ground-breaking new laws on animal welfare in Scotland but said more still needed to be done to help cats.
The charity says new licensing regulations which come into force today will help to stamp out rogue cat breeders who put profit before the welfare of kittens and cats.
Cats Protection’s Advocacy & Government Relations Officer for Scotland Alice Palombo said: “These new licensing laws have come at a time when we need them the most.
“Over the past 18 months of the pandemic, a combination of increased demand for kittens and restrictions on household visiting has created the perfect conditions for unscrupulous breeders to flourish.
“We’ve heard countless stories of how people have been duped into buying underage, poorly kittens which either haven’t survived or have needed costly veterinary care. It’s not just the kittens that suffer – behind closed doors there are many female cats forced to have litter after litter in poor welfare conditions.”
Under the new licensing laws, anyone breeding three or more litters of kittens in any 12-month period must be licensed, and female cats will be limited to having a maximum of two litters within a year.
Breeders will also be banned from breeding cats with extreme traits which can lead to health conditions, such as the Scottish Fold.
Erin Macqueen, 22, from Glasgow, had a devastating experience in March 2021 when the kitten she purchased for £250 turned out to be just five weeks old. The tiny kitten, named Frankie, died just a few weeks later from a condition believed to be related to its poor start in life.
Erin explained: “Frankie had been advertised as a male 12-week-old kitten. When I took Frankie to the vets, I was told she was actually a girl, and was in fact only five weeks old.
“Alarm bells had rung when the seller delivered her to me – she wasn’t even in a cat carrier, the seller just had her tucked under her coat. I could see straight away that Frankie was tiny, but by that point it’s just too heart-breaking to say no. I didn’t know what I’d be sending her back to.”
After becoming unwell, Frankie was diagnosed with untreatable Feline Infectious Peritonitis and had to be put to sleep, causing huge emotional distress to Erin and leaving her with a £750 vet bill.
She said: “It was the vet’s opinion that she developed this as a result of being bred in poor conditions, probably among many other cats and kittens.
“With the benefit of hindsight, I can see that Frankie had probably been one of many kittens just bred and sold to make a quick profit. In her last days of life, she suffered greatly, and it was a very stressful and emotional time.”
With the new laws coming into force today, Cats Protection is now launching its Time is Meow campaign to ask the Scottish Government to go further to help protect cats.
The five-point action plan details what is needed to continue to ensure cats are better protected in Scotland, including the introduction of compulsory microchipping for pet cats, a ban on snares, encouraging landlords to allow renters to own cats, inclusion of animal welfare in the National Curriculum and further work to tackle unscrupulous cat breeding.
Alice added: “Scotland is leading the way in the UK when it comes to regulating cat breeding and animal rescues. As well as these new licensing laws, Scotland also has strict laws on air gun licensing which helps protect cats from the random attacks we see in Wales and England.
“This is all great news, but there is always more to be done and we want to see Scotland go further.
“Our Time is Meow cat welfare action plan includes issues which will benefit people as well as cats – in particular, encouraging landlords to allow their tenants to own a cat. At a time when we’re all spending more time at home, pet ownership is vitally important to our wellbeing and for helping tackle loneliness.”
Tenants and private sector landlords facing financial difficulties caused by the pandemic have more time to access support after two loan schemes were extended.
The Tenant Hardship Loan Fund and the Private Rent Sector Landlord (non-business) COVID-19 Loan Scheme, both of which offer interest-free loans, will continue to receive applications beyond the original deadline of 31 March 2021.
It comes after Housing Minister Kevin Stewart extended temporary regulations banning the enforcement of eviction orders in the private and social rented sectors, giving further safeguards to tenants during the Coronavirus (COVID-19) crisis.
Mr Stewart said: “Throughout this pandemic our focus has been on enabling people to stay safe in their homes while the lockdown restrictions needed to suppress the virus are in place.
“These loan schemes have provided vital support as part of our broader effort to help those facing financial hardship as a result of COVID-19. For the majority of tenants facing financial difficulties and arrears the best means of support continues to be regular non-repayable support, for example through Universal Credit and Discretionary Housing Payments.
“However, for those who may fall through the gap and are unable to claim such support, these funds offer a helping hand to manage any rent issues that have arisen in the last few months as a result of COVID-19.
“We have been clear that no landlord should evict a tenant because they have suffered financial hardship due to the pandemic and that tenants in difficulty should engage with their landlord and seek advice on the options open to them.”
Cats Protection has created an online tool for cat owners that it hopes will help persuade more landlords to allow their tenants to have a cat.
The Cat CV has been created after it was estimated that one million households across the UK would like to have a cat, but can’t due to the fact they are in a rental property.*
Cats Protection’s Head of Advocacy & Government Relations Jacqui Cuff said: “During the past year, we’ve heard countless stories from owners about how important their cat has been. People tell us their cats have provided comfort in worrying times, a playful companion for children as they home school, and helped reduce stress while getting to grips with working from home.
“But very sadly, many people have been denied the simple pleasure of owning a cat, simply because they rent rather than own their home. Now more than ever, we all deserve the chance to own a pet cat, and it is heart-breaking that so many people are not able to.
“Cats rarely cause problems in rented homes, but our Cat CV can help reassure landlords who may be nervous about allowing them. We hope it will help more renters find a happy cat-friendly home where they can feel settled.”
The charity’s Purrfect Landlords CV tool is available to download for free, and helps owners create a summary to show their cat is responsibly owned and well cared-for. Owners can also include references from previous landlords to confirm their cat has not caused any problems.
Caroline Sherlock created a CV for her three rescue cats – Susie, Tia Maria and Sadie – when she was looking for a short-term rental while her own home was being renovated in Horsham, Sussex.
She said: “I wanted to rent a property for just a few months, but it was so hard to find properties that allowed cats. There were lots of adverts for rented properties on websites, but when I ticked the ‘allows pets’ filter, I was left with barely any. I spent hours and hours searching and it was a very stressful experience.
“I found the Cats Protection Pet CV template and drafted one for the three cats, including details of their microchips, flea and worming treatment and their background.
“Then when I found a property I liked, even though it didn’t mention allowing pets, I sent it to the letting agent. He thought it was a great idea and I think it really tipped the balance in my favour as it showed I was a responsible cat owner. I got the property and my cats didn’t cause any problems.
“Cats are fantastic pets, and mine bring me so much happiness and companionship. It’s tragic that so many people can’t have a cat because they live in rented housing, especially during these difficult days when we’re all at home and missing family, friends and work colleagues.
“I really hope the Cat CV will help more people find a suitable rented housing and help landlords take a more open-minded view towards allowing cats.”
Lawyer, author and property investment expert Julie Condliffe is reaching out to landlords, letting agents and property investors with a free legal consultation helpline to support them with expert legal advice amidst the ongoing Covid-19 pandemic.
With provisions made by the UK government only assisting tenants in rented accommodation, many landlords have been left significantly out of pocket by unpaid rents and are unsure of what legal steps they are able to pursue in order to regain control of their property portfolios.
Due to her extensive legal expertise and personal experiences, Ms Condliffe recognises that it is not only tenants who are finding it difficult to get by, and hopes to change the conversation around property development by assisting landlords who need help.
Although the Covid-19 pandemic has undoubtedly been tough for tenants across the UK, many landlords have voiced concerns that public sympathies and government support has been unfairly weighted towards those living in rented accommodation with little support provided to landlords that often rely on rents as a main source of income.
Not only does Ms Condliffe seek to challenge the notion that landlords are able to weather the Covid-19 without the payment of rents, she has also taken practical steps to help offer timely, relevant and professional legal advice to any UK landlord with a free telephone consultation.
Backed by a team of specialist solicitors at Creative Legals, Julie wants to level the playing field by using her standing within the legal community to champion the creation of a new specialist landlord support system.
The Julie Condliffe free legal consultation helpline is available during the lockdown period from 2 November to 2 December 202 and is designed specifically for landlords, letting agents and property investors to meet the gap in the existing market for targeted legal advice catering to landlords.
Julie Condliffe said: “Although I have experienced homelessness myself in the past, it is apparent that the plight of the average UK landlord is vastly under-represented and many landlords have been left in severe financial distress.
“Government assistance mainly focuses on tenants as the vulnerable party in any dispute and have therefore been provided with some assistance to help them through the pandemic. Yet landlords are in a far less favourable position with minimal assistance offered. I want to encourage landlords who are finding themselves in difficulty to use my free legal consultation helpline that they can engage with the expert team at Creative Legals and discuss their own unique circumstances.
“Every case is different, yet there are always ways through even the darkest and most difficult of problems in the property investment sphere.”
To find out more about the Creative Legals team or to book a free, legal consultation visit https://creativelegals.co.uk/
SafeDeposits Scotland is working with landlords who provide student accommodation to help overcome challenges brought on by Covid-19, as the number of overseas students returning to the UK drops.
During lockdown, the not-for-profit organisation reached out to landlords and tenants to provide advice and information around changes to the sector due to the pandemic. It works closely with all landlords including those that have been impacted by the decrease in students enrolling this academic year.
The Glasgow-based tenancy deposit scheme holds deposits on behalf of landlords and agents in line with government regulations designed to ensure responsible leasing.
As the sector continues to work towards pre-Covid-19 levels of activity, SafeDeposits Scotland is urging landlords to focus on providing the best renting experience for current tenants, while considering options to diversify their future tenant base.
Mike Smith, operations manager at SafeDeposits Scotland, said: “UK universities expect to see a £2.6 billion shortfall in the next academic year due to the pandemic, with 20% of domestic students not returning to university, and 75% of overseas students not enrolling this September.
“Pre-lockdown, demand for student accommodation in Scotland was notably high. Boasting some of the UK’s top universities, it’s no surprise areas including Aberdeen, Dundee, St Andrews, Glasgow and Edinburgh experienced an influx of students each year looking for housing.
But despite the drop in numbers of students expected to enrol this year, it’s evident there’s faith in the resilience of the sector, with a number of high-profile developments announced in the past month alone.
“Two recent Edinburgh examples of long-term growth within the sector include the new 120-bed purpose built student accommodation complex set to be built at Haymarket, while Unite Student has confirmed plans for a £24 million build of student flats at Meadowbank.”
To understand the concerns of landlords in the private rented sector during these unprecedented times more clearly, SafeDeposits Scotland carried out research to find out how they have coped during lockdown and how they feel about leasing property in the new academic year.
Mike explained: “We’re confident demand for student housing will return, whether it is in the private rented sector or for purpose-built accommodation. However, until we have a clearer picture of what future academic enrolment figures are like, landlords could consider alternative ways to lease properties.
A good example is renting to young professionals that are looking to move away from home for the first time. The demands of these tenants are similar to students in the private rented sector, and it can be a way of keeping properties occupied until we know more about the future of higher education.
“We recently carried out research with our landlords that are renting to students. This revealed that almost half (43%) secured new tenancies during lockdown while almost three quarters (73%) of this group expressed concerns around what this academic year will look like for them.
“To alleviate concerns, we’ve been working closely with landlords to ensure the tenants they do have in place now have the best experience. To support, we’ve moved our face-to-face workshops online to offer free advice and information. Our Charitable Trust has also recently announced its funding towards research being carried out by the University of Stirling. This research is exploring the benefits of allowing tenants more flexibility to make a house a home.
“We believe having happy tenants leads to longer tenancies, creating more vibrant communities where people want to live. This boosts local economies and helps increase demand for rental property in that area.
“The property sector has been resilient during past economic challenges, but the full impact of the pandemic is yet to be seen. We know the government is working hard to support international students hoping to return to Scotland to continue their higher education studies. This will have a hugely positive impact for our landlords who rely on overseas students to rent their properties, and hopefully we will see the results of this work.
“In the short term, we urge landlords to implement safety guidance from the Scottish Government and manage risk wherever possible, while tenants adhere to the measures put in place.”
A £5 million fund will offer interest-free loans to landlords whose tenants are having difficulty paying rent during the coronavirus (COVID-19) crisis. The Private Rent Sector Landlord COVID-19 Loan Scheme will offer eligible landlords up to 100% of lost rental income for a single property.
It will support private-sector landlords who are not classified as businesses, have five or less properties to rent and have lost rental income due to tenants unable to pay rent as a result of the COVID-19 pandemic.
Housing Minister Kevin Stewart said: “We want to ensure no one loses their home during this unprecedented public health pandemic which is why we passed legislation to protect tenants against any eviction action for six months.
“This new £5 million loan fund builds on that action and offers landlords the same security as tenants, ensuring they have financial support if tenants struggle to pay rent because of coronavirus.
“While all tenants should pay their rent if they can, we recognise the financial pressure people are facing. The Scottish Government encourages landlords to talk to their tenants about rent payment issues. We also expect landlords to be as flexible as possible with their tenants, discuss managing rental payments and help them find sources of financial support and advice.”
Chief Executive of the Scottish Association of Landlords (SAL) John Blackwood said: “We are pleased the Scottish Government has taken this first step in helping the private-rented sector weather the effects of the COVID-19 pandemic, which recognises the role private landlords play in the housing system.
“Collectively the housing sector needs an approach that protects all parts of housing in Scotland to guarantee we can provide the different types of quality housing we need. We want to continue to work with the government, as well as other public bodies, trade bodies and charities to ensure to achieve that and hope there will be further steps taken soon.”
The Private Rent Sector Landlord (non-business) COVID-19 Loan Scheme opened for applications yesterday. Read more information.
