Spoke to a landlord today...

Mallotum_X

Would a student rather live in a modern accommodation block or an old house converted to a HMO... hmm let me think.

Rather than moan he needs to work out where the future tenants are coming from and perhaps update the properties to attract students or some other sector.

IveSeenTheLight

Generali wrote: »

Interesting anecdote.

It's the problem with BTL as an investment rather than a business: there's rarely much diversification there so if something messes with the model (nightclub set up next door/uni builds nice digs for students) you can lose a lot. At least with a diversification of assets you might gain in another area of your portfolio.

I can understand this and the model can of course be continually changing as with any business.

Sounds like the OP anecdote LL may be able to adjust his model, else react to the new competition.

BTL is a long term model, but you always need to keep an eye on the market and get ready to adjust / get out.

It's quite possible, that if they have invested since the late 90's, they will still have made a nice profit from the business.

IveSeenTheLight

princeofpounds wrote: »

It's called competition.

They aren't 'putting pressure', they are providing a better service.

This may be questionable?
I see in my area new student housing and it is badly needed, because of the expansion in student, so this helps to fill a demand requirement.

The thing is as a LL, I know that every year, these students need to leave the student accommodation and often need to move into the private rental market.

I have two ex-students moving into one of my flats in August and they wanted longer term security, hence I agreed to a 2 year lease with a 6 month break clause to provide each other security.

So they get a 6 month lease, which will automatically roll over to 24 months at the same rates should neither party have a reason to invoke the 6 month break clause.

Masomnia

Eggs and baskets springs to mind.

The flashy new accommodation in my day was much more expensive than a lot if not all of the private lets, so it may not be as big an issue as he thinks it might be.

BigAunty

I lived in the city in the 90s when the council bought the HMO policy in because a stingy landlord essentially killed a student because of poor fire safety.

I actually had a temp job with a university accommodation office one summer and they had a file of student complaints about landlords in the west end, often about the failure to get repairs done or the witholding of deposits. The same names of landlords and addresses of properties kept appearing, often of the same ethnicity.

Very few landlords asking the Uni office to advertise their properties in the weekly newsletter had bothered to obtain HMO licences (I think it had been introduced within the last year when I worked there) - we couldn't accept their adverts on these grounds but no doubt they just put up a notice in the newsagents in the Byres Road anyway.

In about 2008, I asked the council how many landlords they had found not fit or proper to rent their properties and how many times they had instructed tenants not to pay the landlord for not being registered on the Scottish Landlord Registration Scheme, and the answer was 'zero'.

The scottish landlord registration scheme was bought in with the rent witholding penalty precisely because the HMO system was failing. They found that landlords were prepared to take the risk of not meeting the HMO requirements because there was only a small chance of being prosecuted and this would result in a small fine, at best, that would cost a lot less than the remedial work.

So the HMO system was routinely abused by rogue landlords and the higher deterrents in place under the Scottish Landlords Registration Scheme were worthless because the local council couldn't be bothered to enforce it.

I have seen lots of large HMOs for sale across the city and west end, often in extremely poor condition, grubby, nasty decor, dated furniture. I recall my friends living in grotty flats back then in flats where the landlord didn't even feel the need to install central heating as they had no problems letting them out due to demand.

I am not surprised that the schemes have made letting large properties to student less attractive to landlords. I have also seen how the local Unis have divested themselves of some of their historic halls of residence, too, so I expect they couldn't turn a profit because of high maintenance costs and the way that many 1st year students no longer want to share rooms.

I have also noticed the large rise in the number of professionally run student halls by independent providers and I imagine these shiny, safe, modern buildings are very popular with todays students who are much more affluent, fussy consumers than the students of 20 years ago.

I think it is the expectations of modern students for their living standards that have made the dingy tenement flats fall out of favour, their desire for privacy and not having to haggle over the bills with their flat mates, the aggro that comes with a joint tenancy, that have made them abandon the drafty HMOs of old.

I see no need for the council to support private landlords - they are at the mercy of the market. It's not the councils (and therefore the taxpayers) fault that 4/5 bedroom tenements are subject to such stringent rules and are less profitable and popular with their target group.

I always felt sorry for the stream of students who were regularly ripped off by landlords who had a portfolio of HMOs near the Uni and did !!!!!! all to maintain them or run them professionally.

princeofpounds

I have also noticed the large rise in the number of professionally run student halls by independent providers and I imagine these shiny, safe, modern buildings are very popular with todays students who are much more affluent, fussy consumers than the students of 20 years ago.

Whilst I found your post very interesting, I found this quite curious. Today's students get no grants and pay vast fees, so how can they really be that much more affluent? Unless they work more of course, or parents are more generous to the tune of over fifteen thousand pounds a year

Masomnia

Everybody can get loans for the fees.

As for the grant and/or maintenance loans, that's more complicated, but there is a good few thousand available to everyone.

And yep lots of parents are very generous.

HAMISH_MCTAVISH

princeofpounds wrote: »

Today's students get no grants and pay vast fees, so how can they really be that much more affluent?

The average student today certainly appears to be vastly more affluent than students in my Uni days.

How they fund it I have no idea, but they seem to live a much more flash lifestyle than my generation ever dreamed of.

the_flying_pig

HAMISH_MCTAVISH wrote: »

The average student today certainly appears to be vastly more affluent than students in my Uni days.

How they fund it I have no idea, but they seem to live a much more flash lifestyle than my generation ever dreamed of.

I daresay that's largely perception based [i.e. not really very true at all].

University participation has roughly tripled since 25 yrs ago [i.e. it's become far less the preserve of the rich than it was], student grants are massively down, student debts are massively up.

princeofpounds

The average student today certainly appears to be vastly more affluent than students in my Uni days.

I daresay that's largely perception based [i.e. not really very true at all].

I can understand why people get that impression, but as flying pig says it doesn't actually make that much sense when you stop to consider the numbers.