Rising costs and increased regulation have prompted increasing numbers of student landlords to sell up, despite continued demand for student HMOs in university cities.

HMO agency YieldMe, which specialises in student properties, reports that it has processed £170 million worth of sales in the last 12 months, equivalent to more than 2,000 student bedrooms, and its highest year on record for transactions.

It follows news that falling numbers of international students and more UK students choosing to live at home has been impacting the sector. Surplus student accommodation has even prompted the owners of one purpose-built accommodation block in Coventry to submit plans to turn part of it into two HMOs.

YieldMe, which facilitates the sale and acquisition of student HMOs, PBSA investments and portfolio disposals nationwide, says sales were strongest across the UK’s leading university cities, where demand for established student HMOs remains strong, particularly in Exeter, Bristol and Bath.

Busier

The firm reports that it has never been busier, fielding enquiries from landlords looking to sell properties, scale back portfolios or rethink their long-term investment plans as rising costs and tighter regulation reshape the sector.

New renters’ rights legislation is one of the reasons behind the sell-off, according to MD James Biddle, (pictured above) who reckons there’s been a noticeable shift in landlord sentiment during the last 12 months. He adds: “Landlords are looking at the direction of the market, the increasing costs involved, and the amount of regulation coming in, and many believe it is the right time to sell up.

Major

“The student market itself is still performing very strongly, particularly in major university cities, but the way landlords operate within it is changing.”

YieldMe believes the level of activity seen over the last year reflects a student property market going through significant change, with more landlords reviewing long-term plans while investor demand for established student HMOs remains strong.

The firm deals largely with larger investors, and while there are still individual student landlords buying at the right price, this has dropped significantly over the last couple of years, and vendors trying to achieve the prices they could have achieved two years ago are struggling to sell, Biddle tells LandlordZONE.

He believes the market is becoming more consolidated, which should improve the overall quality of student accommodation. “Coventry is an example of a weaker market where significant volumes of PBSA have been built, student numbers have fallen and some PBSA blocks are now sitting empty,” he adds. “As a result, YieldMe is staying clear of that market and continuing to focus on stronger university cities.”

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