By Mike White of Martin & Co lettings in Norwich
The market for student lettings in Norwich is dominated by the University of East Anglia with c.15,000 students (c.1700 are from overseas). The UEA is consistently in the top 30 ranked Universities in the UK. It has c.3500 student beds with the remainder being serviced by the private sector. The UEA has invested heavily in its infrastructure in recent years and has ambitious plans for future developments. The total student population in Norwich is in excess of 20,000 when including all Further Education establishments, most of whom are served by private landlords by way of HMO (and non-HMO!) houseshares. The majority of the housing stock used for such purposes continues to be weak. The price range for student accommodation is between £60 per student per week (for the average room in a privately owned “student” house off campus) through to £95 per week. The higher figure reflects the UEA’s “premium” on-campus offering consisting of a 4 person pod each with en-suite. The lower priced accommodation supplies a different tier of demand within the market, although it’s worth noting the £60 figure is exclusive of utilities etc while the £95 is fully inclusive, hence the effective differential is not as wide as it appears on face value. There is no question that student renters (or their parents) are demanding a much higher standard of accommodation (with more facilities included) than ever before and in many of the major cities in the UK, there are a number of commercial property investors pushing into this “sophisticated student” market. Student accommodation has become a powerful niche property sector because it has been able to attract investment from institutional investors. The main providers; UPP, Liberty Living and UNITE have tapped the appetite of funds and institutional investors eager to invest. They all offer modern accommodation with levels of living that the private landlord with one or a few properties would struggle to match. These new build or totally refurbished properties offer such luxuries as wi-fi, laundry, utilities, gym, bike stores and insurance within the rent. So why haven’t we seen these “Big Boys” coming into the Norwich market place? There’s plenty of well positioned brownfield sites available and crying out to be redeveloped, there’s funding available and there’s most certainly a high level of demand amongst students. Well the answer is, watch out, they could be on their way! In fact there are already a handful of such schemes up and running in Norwich albeit very much on a small scale compared to some cities. Where does this leave the traditional student landlord and their traditional letting agent? Well, possibly out in the cold. There is almost certainly going to be a continued demand for independent small scale landlords but they are going to get squeezed more and more by the demands of students and the ability of bigger players being able to deliver those needs. Only those landlords willing to change their offering will be able to compete. Those who don’t will end up with costly properties standing empty. These changes should include using a letting agent with a truly national reach, after all the vast majority of students attending the UEA etc are coming from outside of Norwich. The new HMO laws introduced on 1st April are only going to make life harder for independent landlords.
Mike White is on 01603 766860.