The pandemic has had a major impact on the student rental market, a new analysis by Goodlord has revealed. During 2020, revenues from student lets dropped by 30% compared to figures from 2018 and 2019.
Goodlord analysed 255,000 tenancies from January 2018 through to December 2020. This research found that, between 2018 and 2019, 12p in every £1 spent on rent in England and Wales could be attributed to student rental properties. In 2020, this dropped to just 8p in the pound - a fall of 33%.
With many students choosing to defer their university studies or deciding to live at home whilst learning is remote, there has been a considerable impact on the rental market. With most second and third year students renting privately, this dip will have been felt most keenly by private landlords, rather than universities or colleges.
Across 2018 and 2019, the student rental market hit its peak in September and represented 20p in every £1 spent on rent in England and Wales. But in September 2020, this had dropped to just 14p in every pound, as demand fell ahead of the new university term.
Cost of rent declines
As demand declined throughout 2020, the cost of rent for student properties also fell. During 2018 and 2019, the average price of a student property was £1,265. In 2020, it was £1,012 - a fall of 20% on average across England and Wales.
The average cost of rent in September 2018 and 2019 (when the student lets market is busiest) was £1,350 per student property. In September 2020, student properties were being let for £1,000 on average.
The number of students renting
The percentage of student lets within the wider rental market also fell during 2020. In 2018/19, the proportion of student renters was 9.68% of the total rental market. In 2020, this had fallen to 8.28% - a decrease of 14%.
Early indications for 2021 suggest this year will continue to be sluggish for private landlords who let student properties - with the first two months of 2021 seeing a 37% drop in the cost of rent compared to the same time last 2020, before Covid-19 struck the UK.
Tom Mundy, COO of Goodlord, comments: “With such a large proportion of students now learning online, it’s no surprise that a big chunk of potential renters have forgone taking on tenancies over the past 15 months. This represents a huge hit to this section of the rental market and the depressed demand is clearly reflected in the average price of rent for student properties. Figures for 2021 to date show an even slower picture, as students continue to delay decision making until their universities provide clearer guidance on when teaching will take place in person once again. We predict a big boost to demand from the summer onwards if universities confirm plans for what’s hoped to be a more ‘normal’ academic year.”
