Universities reach out to rental guarantor services as in-person learning resumes

Universities reach out to rental guarantor services as in-person learning resumes

United Kingdom
  • Housing Hand sees increase in universities exploring commercial arrangements
  • Universities being asked to do more with less, creating financial pressure points
  • Imbalance between returning students booking accommodation and first-years hesitating

UK rental guarantor service Housing Hand has reported an increase in the number of universities enquiring about commercial arrangements, as Covid-related pressures continue to impact the UK’s higher education sector. The increase speaks to the difficulties that universities are facing as they seek to do more with less, welcoming all students back to in-person learning from 17 May.

Universities have spent the last year in crisis mode. They have had to deal with multiple lockdowns, set up widescale home/virtual learning and manage the impact of students who have tested positive for Covid. All while dealing with the economic fallout of a lower intake of students for the 2021/22 academic year as Covid fears persist (mainly fewer EU and other international students, but also those from the UK).

Universities being overworked and under-resourced is nothing new. Budget cuts were already biting, even before the pandemic. However, Covid has exacerbated the financial difficulties that universities and their students face. Increasing rent relief bills are taking their toll and many universities are now seeking alternative ways to support their students to remain in their accommodation should they experience financial hardship.”

Jeremy Robinson, Group Managing Director, Housing Hand

 
Many students struggle to provide a qualifying UK rent guarantor when renting in the private sector. Housing Hand partners with universities in order to help alleviate this issue for their students. The award-winning company acts as a rental guarantor service for students from the UK and overseas, covering rent, damages and dilapidations.

The university model enables higher education institutions to partner with Housing Hand as a white label service. The university promotes the service to its students, while Housing Hand provides integration, co-branded application pages with an affiliate link and marketing materials. Students pay a reduced fee for the Housing Hand service, while the university doesn’t need to worry about the admin side of the process.

“The way we work with universities provides a win-win. Students can access the rental guarantor service they need at a lower cost, while the university takes on no financial risk. The risk sits with Housing Hand, and is backed by quality and financially rated insurance products. With some unusual fluctuations in the usual student rental patterns due to Covid, this no-risk approach is inspiring increasing numbers of universities to investigate the role of rental guarantor services.”

Terry Mason, Group Operations Director, Housing Hand

Although UK universities expect to re-open for in-house lessons this month, many students are hesitant to enrol for the 2021/22 academic year while Covid remains a threat. This is compounded for European students by Brexit for all international students by the current difficulties in moving between countries.

We can see this playing out across houses in multiple occupation (HMOs), where returning students have provided a steady stream of bookings. However, the purpose-built student accommodation (PBSA) sector has been a very low uptake of rooms by its traditional cohort of first years.

“As the UK’s vaccination programme progresses and confidence improves, it’s likely that there will be a last-minute dash for places. This will create a flurry of activity in the accommodation sector, as students rush to secure rooms with far less planning than would usually occur. With costs spiralling and high levels of debt, UK universities are already under significant pressure. They need to do all they can to accommodate a rush of last-minute enrolments, including helping students to find the accommodation they need.”

Terry Mason, Group Operations Director, Housing Hand

For more information please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Covid crisis highlights value of rental guarantor services

Covid crisis highlights value of rental guarantor services

United Kingdom
  • Rental guarantor services address key concerns for tenants, landlords and letting agents
  • Eviction ban end to result in further pain for landlords and tenants alike
  • Using personal guarantors now seen as even riskier than previously

The pandemic has seen tenants, landlords and letting agents all suffer in different ways as a result of Covid’s economic fallout. When the eviction ban ends on 31 May, that situation is likely to get worse – and not just for those tenants who have been unable to pay their rent. Jeremy Robinson, Group Managing Director of UK rental guarantor service Housing Hand, explains:

The delays in the courts for landlords looking to evict non-paying tenants are likely to be unprecedented, with the backlog of evictions having built up since the government first put the ban in place. This piles even more stress onto landlords who are already having to cover mortgages on properties that aren’t providing any income. It also means letting agents going without their cut of the rent for many more months while courts process the backlog. And for tenants, there’s the additional stress of falling even further behind with their rent while waiting to be taken to court. Everybody loses.”

Jeremy Robinson, Group Managing Director, Housing Hand

While nobody saw the pandemic coming, there are plenty of lessons to be learned about risk avoidance for future major crises. One is the value of rental guarantor services. These are services that the tenant pays for to ensure that, should they become unable to pay their rent, it will still be paid: the guarantor company steps in and pays 100% of it for them. The tenant gets to keep their home, the landlord continues to receive an income and the lettings agency continues to receive its share.

The pandemic has also highlighted the value of rental guarantor services when compared with personal guarantors. Personal guarantors who were in a position to act as such at the outset of the pandemic may now be in very different financial situations. Relying on a personal guarantor for rent payments now carries much the same risk as relying on the tenant.

There are two other options available to landlords looking to ensure that non-payment of rent doesn’t lead to non-payment of their mortgage. One is rental insurance, where the landlord simply buys a policy, then makes a claim in the event of rent not being paid. The other is a company guarantor, which is where a company agrees to act as a guarantor for one of its employees. However, both of these models are flawed, according to Housing Hand’s Group Operations Director, Terry Mason:

“Insurance companies are known for not paying out on every claim. This has the potential to leave landlords unexpectedly out of pocket. Company guarantors, meanwhile, may be in very different financial positions than they were at the start of the pandemic, so carry risks of their own.”

Terry Mason, Group Operations Director, Housing Hand

For tenants and landlords looking for maximum protection, rental guarantor services that are underwritten by an insurer offer the greatest peace of mind. Housing Hand, for example, is backed by Lloyds syndicate insurance. It delivers 100% pay-out and continues until the end of the tenancy.

While many landlords – and their letting agents and tenants – have missed out on the benefits of rental guarantor services during the pandemic, those looking for a reliable safety net in future have everything to gain.

For more information, please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Housing Hand highlights financial plight of international students, in face of 17% rent rise

Housing Hand highlights financial plight of international students, in face of 17% rent rise

United Kingdom
  • Brexit has quadrupled some course costs
  • Rents projected to rise by 17% over next 5 years
  • Students from EU/EEA and Switzerland can no longer apply for student loans

UK rental guarantor service Housing Hand has spoken out about the financial plight that international students are facing in the UK.  

Students coming to the UK from overseas are facing the perfect storm. Brexit has increased course costs hugely for those coming from the EU/EEA and Switzerland, at the same time as rents are projected to rise steeply. We’ve also got Erasmus funding ceasing, in addition to the withdrawal of student loan facilities. This is going to place a huge additional financial burden on many young people over the next few years.”

Jeremy Robinson, Group Managing Director, Housing Hand

UCAS’ end of cycle analysis 2020 shows an increase of 1.7% in student numbers from the EU (excluding the UK) being accepted onto UK higher education courses between 2019 and 2020. Non-EU acceptance numbers rose by 16.9% over the same period.

Course costs for these international students are significantly higher than for UK-based students, whose fees are capped at £9,250 per academic year. Those coming to study here from overseas are often charged three to four times this amount, with costs varying based on the degree course and the university. Students from the EU/EEA and Switzerland had their fees capped in the same way, but from August 2021, that cap will no longer apply.

The UK’s withdrawal from the Erasmus funding programme after the end of the academic year in 2021 will add to the pain, as will the fact that students coming from the EU/EEA and Switzerland can no longer apply for student loans.

“It is the rising cost of renting accommodation in the UK that is really adding to students’ plight. While we’ve seen landlords offering lower rents over the past year, as a result of the pandemic, projections show that rents are set to increase significantly between now and 2025.”

Terry Mason, Group Operations Director, Housing Hand

It is Savills’ data that has flagged up the likelihood of rising rents. The company projects that rents across the UK will rise by 0.8% in 2021, then accelerate the pace at which they are increasing, with total growth of 17% by 2025. For students on limited budgets – those from the UK as well as from overseas – that means having to find even more cash to pay their way through university.

“The spiralling costs of higher education in the UK – including students’ accommodation – increasingly mean that only those from higher income families are likely to have the option to attend. This is particularly the case for international students, given the impact of Brexit on the cost of studying in the UK.”

Terry Mason, Group Operations Director, Housing Hand

For more information, please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

How far will landlords and letting agents go to attract renters?

How far will landlords and letting agents go to attract renters?

United Kingdom
  • Housing Hand data reveals 22% reduction in rents in the past year
  • Landlords and letting agents slash rents in many areas to entice tenants to move in
  • February marks 9th consecutive month of price falls

Newly released data from UK rental guarantor service Housing Hand has revealed a sharp drop in rents as the pandemic continues to put pressure on the housing sector.

The largest rental guarantor service in the UK, Housing Hand is uniquely positioned to monitor market activity from the perspective of tenants, landlords and letting agents all at once. The company has saw average rental values (compared to a year earlier) begin to decline in June 2020, when rents dropped to 11% below their June 2019 level.

Rents have continued to fall in many areas ever since, with the data for February 2021 showing that rents are now 22% below the level they were at in February 2020.

We’ve seen average rents fall steadily for the past nine months. In big cities like London, where tenants have moved outward either because of fears over the pandemic or due to the fact that they no longer need to be near the office to work, this fall is even more pronounced.”

Jeremy Robinson, Group Managing Director, Housing Hand

The last two months of the year are usually the low season for landlords and letting agents. By October 2020, rental values were 14% below their level a year earlier. As such, many slashed rents even further in order to try and entice tenants to move in.

“As the pandemic continues to push people from city centres to their outskirts, rents in central areas are likely to drop even further. Not only are landlords and letting agents slashing prices in many areas, we’re seeing an increasing number of rental schemes offering one or even two months’ free rent in order to encourage tenants to sign on the dotted line. Again, this is particularly prevalent in city centres. It begs the question: how far will landlords and letting agents go to attract new tenants?”

Terry Mason, Group Operations Director, Housing Hand

The Covid-19 pandemic has certainly done much to turn the housing sector on its head, with government racing to introduce new initiatives to keep the market ticking over despite the painful economic backdrop. The eviction ban, in particular, has done much to protect tenants who can’t pay their rent. Unfortunately, it has also left many landlords unable to pay their mortgages. With rents now steadily declining in many areas, according to Housing Hand’s figures, it seems that the misery is far from over for both landlords and letting agents as 2021 unfolds.

For more information, please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Domestic student demand for rental guarantor services up 12%, reports Housing Hand

Domestic student demand for rental guarantor services up 12%, reports Housing Hand

United Kingdom
  • 30% of students housed in private rented accommodation (HESA)
  • Non-EU student enrolments up 59,000 (2019/20)
  • Student accommodation sector needs to expand while remaining affordable

It’s been an interesting couple of years for the UK in terms of its international student numbers. The government’s International Education Strategy has a target of hosting 600,000 international students by 2030, despite the current complexities of the Covid-19 pandemic and Brexit. Hitting the target would mean the industry’s economic impact reaching £35bn annually, making it an attractive aim.

The 2019/20 academic year was certainly a good one for non-EU student numbers, with enrolments shooting up by 59,000 students, taking non-EU total enrolments to 556,625.

So, what does this mean for pressure on student accommodation? UK rental guarantor service Housing Hand has been working with both domestic and international students since 2013, helping them to secure accommodation in their university town or city by acting as their guarantor. The market has changed a great deal since then, with a major boom in Purpose Built Student Accommodation (PBSA), although figures from Glenigan show that planning consents for such properties have dropped every year since 2017.

Nor are PBSA homes suited to all students. Many prefer to live in halls, while figures from the Higher Education Statistics Agency show that around 30% of students opt for private rented accommodation.

The UK has an interesting spread of student accommodation, with some university cities suffering from a deficit of suitable homes and others a sizeable glut. The fluctuations in student movement patterns that the pandemic has created is further complicating this picture. However, the long-term view is a positive one for student numbers, particularly those from overseas. This means that the accommodation sector needs to prepare to house increasing numbers of talented young people over the years ahead and to do so in an affordable way.”

Jeremy Robinson, Group Managing Director, Housing Hand

Affordability is a key concern for many students and especially so for those without a rental guarantor. At a time when many parents and guardians have been furloughed, have lost their jobs or face the prospect of losing their jobs, signing up to guarantee a child’s rent becomes a far more dauting prospect.

This is one of the reasons that Housing Hand has seen such a sharp rise in the number of domestic students using its services. Between November 2019 and November 2020, demand from UK students increased by 12%. While international student numbers dropped over the same period, in line with trends across the sector as a whole, the long-term prospects remain bright.

“International demand for university education in the UK has necessarily been curbed by the pandemic and its associated travel restrictions but the longer-term outlook is one of growing demand. We need to ensure that appropriate accommodation is in place, therefore, for the growing body of students that the UK will be housing. That includes an emphasis on affordability, to ensure that young people can focus on their studies, rather than having to find several months’ rent upfront because they don’t have a guarantor.”

Terry Mason, Group Operations Director, Housing Hand

For more information please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Housing Hand warns of increasing unsustainability of using landlords to support non-paying tenants

Housing Hand warns of increasing unsustainability of using landlords to support non-paying tenants

United Kingdom
  • 700,000 tenants and landlords could be dealing with rent arrears by end of 2021 (LSE London/Trust for London)
  • Eviction ban well intended but fails to protect increasingly desperate landlords and letting agents
  • Clock is ticking for government to step in

UK rental guarantor service Housing Hand is speaking out on behalf of landlords who are suffering at the hands of the government’s eviction ban. The legislation has been designed to protect tenants who have suffered financial loss as a result of the Covid pandemic. However, in so doing, it is creating an increasingly difficult situation for many landlords. Some are facing not just losing their investment properties but their homes as well.

The intentions of the eviction ban to protect individual tenants are excellent, but the situation unfortunately doesn’t take all those involved in the rental transaction into account. The financial impact of tenants who can’t afford to pay on landlords is devastating.”

Jeremy Robinson, Group Managing Director, Housing Hand

The clock is certainly ticking. According to research by LSE London and Trust for London, the number of private tenants in rent arrears in England could treble in the coming year. That could mean as many as 700,000 tenants – and their landlords – in financial difficulty.

Housing Hand points out that letting agents, too, are suffering Letting agents receive a percentage of a property’s rent as a management fee, but 15% of £0 is £0. This means that there is a limit to how long agents, as well as landlords, can continue to operate with a reduced income. Client Money Protect reported at the end of 2020 that lettings agencies were closing at a rate of ten per week. Housing Hand believes that around 4% of all letting agencies closed their doors for good during the year.

The eviction ban is currently due to run until 21 February but has the potential to be extended in line with continuing lockdown restrictions. Such a move would mean that landlords, and the letting agents whose businesses they support, could face further weeks or even months of financial struggle. For those with mortgage payments to cover, the situation is increasingly unsustainable.

“The government must stop using private landlords to house tenants who are unable or unwilling to pay their rent. These are difficult times for all concerned and a new solution is needed – one that supports all those involved in the rental sector.”

Terry Mason, Group Operations Director, Housing Hand

The situation highlights the value of professional rental guarantor services, which guarantee landlords will receive their rental payments, even when tenants cannot afford to pay. Housing Hand has covered £587,626,099 in rent to date, working with over 3,000 accommodation providers.

“Those without a guarantor company in place are likely to see landlords increasingly turning to their personal guarantors for payment over the difficult months ahead. It’s a role that parents often fulfil, but how many of those acting as guarantors are also finding that their income has been reduced or lost entirely? The government needs to do more to step in and prop up the private rented sector in these truly exceptional times.”

Terry Mason, Group Operations Director, Housing Hand

For more information, please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Hold on tight to the UK rental sector roller-coaster

Hold on tight to the UK rental sector roller-coaster

United Kingdom
  • Housing Hand’s figures highlight notable shifts in student rental market
  • Furloughed/unemployed parents turning to rental guarantor services for their offspring
  • Housing Hand records surprising 8% jump in international working professionals
  • Figures point to continuing volatility of private rented sector

Newly released data from UK rental guarantor service Housing Hand has highlighted the volatility currently being experienced across the UK’s private rented sector. The company acts as a rental guarantor for students and working professionals and has seen significant shifts in demand for its services over the period from November 2019 to November 2020.

Demand for rental guarantor services for students was notable for a number of reasons. While there was an overall increase in the number of students that Housing Hand guaranteed over the period, there was a drop-off in international students.

The fall in demand from international students aligns with wider data trends across the industry. Between travel restrictions, lockdowns, a shift to online learning and Brexit, international appetite for UK higher education has been impacted significantly. This is why we’re seeing such low occupancy rates in London for purpose-built student accommodation right now. It will be interesting to see the impact that all of this will have on the January intake.”

Jeremy Robinson, Group Managing Director, Housing Hand

Student rent strikes across the UK are also feeding into this volatility. However, despite the unrest, Housing Hand recorded a 12% increase in the number of UK students using its service. The lower grade boundaries offered by universities following the UK’s A Level grading controversy in August 2020 has played a part in this.

It’s also likely that many parents and guardians who are currently on furlough or unemployed are now turning to Housing Hand to secure their properties. Even those still currently in employment may wish to avoid acting as guarantors themselves, in case that situation suddenly changes.

Nor is it just the student part of the private rented sector that is experiencing shifts in renter patterns. Housing Hand recorded a surprise increase of 8% in the number of international working professionals that it guaranteed between 2019 and 2020, despite the uncertainty surrounding Brexit and the Covid-19 pandemic.

“The growth in demand for rental guarantor services by working professionals from overseas flies in the face of what we were expecting to see. It highlights the continuing diversity of the UK workforce, despite the wider political, economic and medical situation. During 2021, hopefully this will continue; however, the first three weeks of the year have shown a slow start, so watch this space.”

Terry Mason, Group Operations Director, Housing Hand

Even with mass vaccination underway, the impact of the Covid-19 pandemic is likely to be felt across much of the UK’s private rented sector over the course of 2021. Economic uncertainty means that many of those in the UK are seeking the reassurance that a professional guarantor service provides, rather than the risks associated with a parental guarantor.

“From a landlord’s perspective, rental guarantor services mitigate the increased risk that is now associated with parental guarantors. Just as many renters may be facing personal economic uncertainty, so too are their parents. This is why professional guarantor solutions are so prized by landlords and letting agents right now.”

Terry Mason, Group Operations Director, Housing Hand

For more information please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

The rental market in lockdown 3.0 and beyond – what’s does 2021 have in store?

The rental market in lockdown 3.0 and beyond – what’s does 2021 have in store?

United Kingdom
  • Housing Hand looks at student and wider rental market for coming year
  • Brexit to compound impact of COVID-19 on landlords
  • Hope on horizon from 2022 onwards

2021 was viewed by many as a fresh start – a chance to move on from the myriad difficulties of 2020. Yet January brought more of the same almost immediately, with school closures and the strict implementation of lockdown 3.0. There’s been plenty of speculation about what this could mean for the UK’s property sales over the coming year, but what about the private rented sector?

UK rental guarantor service Housing Hand works with landlords and tenants across the UK, providing the company with plenty of insights into the difficulties that the sector is facing. According to Group Managing Director Jeremy Robinson, 2021 could be a bumpy year for the rental market.

The pandemic has created a number of issues, ranging from tenants becoming unable to pay their rent to would-be renters experiencing difficulties during the referencing process. The latest lockdown and its subsequent economic impact have the potential to exacerbate these problems significantly.”

Jeremy Robinson, Group Managing Director, Housing Hand

And then there’s Brexit. COVID-related travel restrictions have largely eclipsed Brexit-related issues so far. However, the impact of changes to flows of workers and students into the UK from Europe will be increasingly felt over the course of 2021, according to Housing Hand’s Terry Mason.

“A large number of those who travel to the UK for work or study rent their homes privately while here. Landlords who serve that market are going to feel the impact of Brexit strongly this year.”

Terry Mason, Group Operations Director, Housing Hand

COVID comes into play as well for the student private rental market. Should universities deliver courses virtually rather than in-person come the start of the new academic year in September, there’s likely to be a significant impact on those who usually rent properties to students.

Thankfully, the news isn’t all doom and gloom. Rural areas and the Home Counties have enjoyed a surge in rental demand as tenants move out of London and other major cities and Housing Hand anticipates this trend continuing in 2021, as renters continue to drift out of urban areas as their current tenancies expire.

“Lockdown 3.0 will once again emphasise the benefits of renting larger properties with outside space. The Office for National Statistics reports that 21% of London’s households have no access to a garden, either private or shared. The lower cost of renting outside of the city means that a garden suddenly becomes much more affordable.”

Terry Mason, Group Operations Director, Housing Hand

A further glimmer of hope for landlords is that, while COVID has had a significant impact on the UK rental sector, there’s every reason to believe that a return to pre-pandemic normality will take place at some point once vaccinations reach the required levels. Hopes may not be too high for this to happen in 2021, and certainly not in time to mitigate the impact of lockdown 3.0, but there is a brighter future ahead eventually for both landlords and tenants.

For more information please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Rental guarantor services “keeping up momentum” in private rented sector, reports Housing Hand

Rental guarantor services “keeping up momentum” in private rented sector, reports Housing Hand

United Kingdom
  • Guarantor services providing accommodation providers with more potential tenants
  • No-cost solution for landlords protects them against lost rental income
  • Guarantors helping to mitigate COVID’s impact on private rented sector

UK rental guarantor service Housing Hand has highlighted the importance of professional guarantors in keeping the private rented sector buoyant during the COVID-19 pandemic. The largest rent guarantor service in the UK, the company works with accommodation providers to deliver access to a wider pool of tenants.

By acting as a guarantor for working professionals and students, Housing Hand increases the number of renters available to accommodation providers, thus helping to keep the market buoyant, despite the financial uncertainties that currently abound.

Rental guarantor services help tenants to access the accommodation they want, but they are also hugely beneficial to the providers of that accommodation. They provide a degree of certainty, as landlords know that there is a professional service ready to step in should the tenant become unable to pay their rent. In these uncertain economic times, that knowledge can be very reassuring; it is keeping up momentum in the private housing sector.”

Terry Mason, Group Operations Director, Housing Hand

Housing Hand’s service, which is free for landlords and agents to use, can provide payment to an accommodation provider in the event that a tenant is unable to do so. The award-winning service also comprehensively covers damages and dilapidations. To date, Housing Hand has worked with over 3,500 accommodation providers and has covered more than £646 million in rent since 2013.

With a professional guarantor service in place, landlords are able to move forward with tenancies that may not otherwise have been viable, as they have the reassurance that they won’t end up out of pocket.

Housing Hand’s service is available to landlords, letting agents, universities and purpose-build student accommodation providers. In every case, the company works to provide access to a greater number of potential tenants.

“The rental sector is often quick to feel the impact of recessionary times. The COVID-19 pandemic has presented some unique economic challenges, which we will need to work together to overcome. Hopefully, by supporting the fluidity of the rental sector, we will help to mitigate at least some of the impact of the pandemic.”

Jeremy Robinson, Group Managing Director, Housing Hand

For more information please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/

Students to serve as landlords’ ray of light in 2021

Students to serve as landlords’ ray of light in 2021

United Kingdom
  • Housing Hand forecasts Brexit as exacerbating economic impact of COVID-19
  • Falling property prices, tax changes and fewer international renters will mean a tough year for landlords
  • A bumper cohort of students in September 2021 will provide the sole ray of light

Many people are looking to 2021 to deliver them from the horrors of 2020. However, with mass vaccination likely to take months and the impact of Brexit thrown into the mix, there’s unlikely to be much for landlords to celebrate during the first half of the year.

UK rental guarantor service Housing Hand has flagged up the combined impact of falling property prices, tax changes and lower numbers of international renters as a major stumbling block for the UK rental sector over the year ahead.

The only thing certain about the UK rental market following Brexit, is uncertainty. Landlords face uncertain income from tenants, while tenants continue to face uncertain income due to the pandemic. Meanwhile, the number of working European tenants is likely to drop due to Brexit and COVID. All against a likely backdrop of falling property prices.

The requirements for European tenants to travel, work and rent in the UK will change as a result of Brexit. Renting is likely to become more difficult, as the right to rent requirements will almost certainly change at some point in the not-too-distant future. Brexit’s effect on rental property, compounded by COVID, tax and legislation changes, means it is difficult to foresee many positives for landlords in 2021.”

Jeremy Robinson, Group Managing Director, Housing Hand

According to JLL, house prices in 2021 are likely to drop by 1.5%, with rental values falling by 1.0%. Lost GDP growth, rising unemployment, falling housing affordability and the removal of the furlough scheme will all play a role in this. Others in the industry are more confident, forecasting growth in prices in 2021, though the end of the Stamp Duty holiday could have a significant impact. In any case, the market for capital growth is likely to be flat.

Growth in income for landlords will also be a challenge due to increased competition. With job availability decreasing and freedom to travel for work stopping from Europe, the number of tenants coming into the UK will decrease, exacerbating landlords’ troubles.

Fewer international tenants, an increase in tenants defaulting on rent and a likely oversupply of rental accommodation shifting the national picture to a tenants’ market rather than a landlords’ one certainly paints a grim picture. However, Housing Hand does highlight one ray of hope: students.

“The indications are that the 2021/22 academic year is likely to be a bumper year for students, with little reaction to Brexit. We have last year’s candidates who decided to take a year out rather than attending university now wanting to start. We also have a larger number of students reaching university age with fewer jobs available, meaning going to university becomes a safer option. Then there’s the fact that a larger number of international students started university in 2020 and will thus be returning for their second year.”

Terry Mason, Group Operations Director, Housing Hand

Knight Frank and UCAS report that 30% of first-year students live in privately rented accommodation or at home with parents or guardians (in addition to the 30% who live in private purpose-built student accommodation). As such, a bumper year for university entrants spells very good news for landlords with properties in the right locations.

Rental guarantor services, meanwhile, provide those renting to students (and, indeed, working professionals), with the peace of mind that they won’t end up out of pocket should the tenant fail to pay their rent. This means that landlords can be confident in capitalising on renting to students over the course of 2021 – a ray of hope to which many will likely be clinging.

For more information please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/