Student landlords in trouble due to Covid-19
Buy-to-let landlords specialising in student accommodation are facing huge challenges with increased government legislation and the impact of Covid-19 on occupancy, said Mistoria Group, student buy-to-let investment specialists.
Student landlords could see a huge drop in demand for accommodation when the next academic year starts.
Some universities are focusing on online-only teaching, which may lead to students studying at home or deferring their entry for another 12 months.
Mish Liyanage, managing director of The Mistoria Group, said: “Student landlords are facing a very tough few months and this is driving some of the smaller players to cut their losses and sell up.
“It is no surprise that many landlords providing student accommodation are deeply concerned with the viability of the market. Historically, they have enjoyed excellent yields and great occupancy, but now they are facing unprecedented times.
“The last thing they need is more legislation that will make it harder to let to students. This is where companies such as Mistoria can help landlords to diversify into other rental and tenant segments, such as young professionals and social housing, which will enable properties to be fully let.
“Also, with the increased legislation and health and safety requirements, Mistoria ensures investor’s properties are fully compliant. Established student HMO property investors will be able to overcome these challenges and grow their portfolio further, while small time, or accidental landlords may be driven out of the market.”
The planned scrapping of Section 21 poses another threat to student landlords, many of whom believe it will make it harder to let to students.
Currently, landlords issue a fixed-term tenancy after which they can let the property to new students.
The scrapping of Section 21 will mean that student landlords will need to turn to a Section 8 notice, which can be used if a tenant falls into arrears; has been involved in criminal or anti-social behaviour; or broken the terms of their tenancy agreement.
However, Section 8 notices can be challenged much more easily than Section 21, which is leading to fears that landlords may not be able to regain possession of their properties quickly.