The top five reasons to let to students.

17/10/2013 By Mark Long

The private rental sector is growing faster than any other form of housing tenure and now accounts for 17% of all UK property stock. Around 1.3m private landlords are offering accommodation to a vast range of tenant types.

BVA BDRC's survey of Britain’s landlords suggests that ‘young couples' and ‘families with children' top the list with around 50% of landlords offering accommodation to these groups.

But are there tenants that landlords (and lenders) would prefer not to offer space to? In October BVA BDRC surveyed more than 1,000 landlords and asked if there were types of tenant they prefer not to engage with. The results were enlightening.

Only 2% said they would reject a ‘white collar professional' tenant, but local housing allowance (LHA) claimants and students appeared to have a much poorer reputation with private landlords. 52% of landlords would not let to ‘local housing allowance (LHA) claimants' and 37% would say no to ‘students'.

Not all landlords agree, however. More than one-in-five landlords were active in the LHA and student sectors respectively, indicating that these segments can be made to work profitably in many cases.

The data indicated that letting to students could bring a number of benefits, the top five being low voids, low arrears, low recourse to legal services, high income levels regardless of property type and high profitability.

There are some lessons for lenders here too. There is compelling evidence that the student segment in particular offers a better risk profile than some mainstream tenant segments, and that buy-to-let providers inclined to de-select borrowers letting to students may want to reconsider that policy.

Now, who ate my last Pot Noodle?