It’s good news for landlords whose portfolios focus on the student sector – the Financial Times has reported a significant rise in lettings by overseas students as their parents shun buying a property for their children.
Overseas buyers with children at university in the UK often purchase property for them to live in while they study, through company structures. This is typically to preserve their anonymity, as well as reduce tax bills. But many are now renting, rather than buying, prime property.
Many wealthy parents who would normally have bought an apartment for their children to live in during their studies are delaying a decision until the tax position is clearer, and are renting in the meantime. This is having the effect of pushing up rents and leading to a scarcity of property for rent at the top end of the student market.
As well as introducing a new top rate of stamp duty at 7 per cent for all homes over £2m, the government recently brought in a 15 per cent levy on residential properties costing £2m or more and bought through a company structure.
The effect of this is particularly noticeable in London where popular student areas – those close to universities, such as Knightsbridge, favoured by Russian families, and Belgravia, one of the top locations for Chinese students – have seen a 28% rise in lettings to students, compared to last year.
Overseas students make good tenants for UK landlords and can be lucrative, as they tend to prefer modern, well appointed properties in prime locations and the bills are usually picked up by wealthy parents.
An online letting agent for student properties can provide you with more information on student lets. See http://www.accommodationforstudents.com/ for more information.
