Recent data shows students returned to university in larger numbers this year as in-person attendance resumed. The Deposit Protection Service recorded 25% more student deposits between 1 August and 26 October 2021 compared to the same period last year.
On top of that, August was even the busiest month on record for the service’s deposit registrations in student areas across England and Wales and was the sixth consecutive month that registrations in student areas were higher than in the same month last year.
It’s no surprise then that the 2021-22 university year has seen a record number of students taking up university places. So far, this university term has provided a return to more normality, and everybody is hoping that continues throughout the rest of the academic year.
Many students are also already searching for and taking up properties for the 2022-23 university year. Moving forward, there is expected to be further growth in the student HMO market in particular as more and more people are going to university across the UK and as co-living has become a popular choice among students.
Are you interested in investing in student HMOs or are confused about what students want nowadays? In this blog post, we’ll cover the role housing plays in the student experience, the benefits of investing in the student HMO market, and how to understand tenants’ changing needs.
Housing Plays An Important Role in The Student Experience
Living away from home is a big part of going to university, giving housing a crucial role in the overall student experience. This is particularly the case after the COVID-19 pandemic and successive lockdowns, as students are prioritising a more immersive university experience
High-quality HMO properties that provide good value will be important for students and their time at university. Well-designed spaces and the right amenities can even impact and improve students’ everyday lives.
What Are The Benefits of Investing in Student HMOs?
Student HMOs make up the majority of HMO properties in the UK. It’s a well-established investment strategy, and the student HMO market comes with some exceptional benefits for property investors.
One of the major benefits of student HMOs is the associated rental demand that comes with it as it’s a relatively safe bet that universities aren’t going anywhere. And every academic year, universities are bringing in more and more students to the local area.
These students could then ultimately become your tenants. And the more prospective tenants are in the area you’ve invested in, the better chance you have of continuing to fill your property in the years to come, which can minimise your void periods.
Co-living is particularly appealing to young people and especially students. One of the predominant reasons tenants choose co-living is it tends to be cheaper to rent, and HMOs provide better value when compared to purpose-built student accommodation. Shared accommodation in general provides flexibility and can help tenants feel less isolated as well.
Student HMOs are also consistently outperforming other areas of the private rented sector. Interestingly, it’s not just the largest university cities that are seeing strong demand and rental yields, data from Paragon Bank revealed smaller university towns and cities are performing well too.
What Do Students Need From Their House?
Moving forward, it will be especially important for HMO investors to understand students’ needs and motivations. Adapting to these changes can also help you stay ahead of the competition and allow your property to be more appealing to prospective tenants.
Additionally, as standards continue to improve in the student HMO market, it’s important for landlords to ensure they are surpassing the competition and providing what tenants are demanding from their rental properties.
You may be asking yourself what are students looking for in their homes? Here are six of the top features we’ve found students are currently wanting in the properties they rent.
1. Dedicated Study Space and High-Speed Internet
As the COVID-19 pandemic has accelerated the delivery of online learning, this will likely be used alongside face-to-face learning even post-COVID and will further boost the need for high-speed internet and dedicated space for studying and attending online classes.
Tenants will no longer stand for slow connections so they can easily study from home. And it could even be worth finding ways to adapt co-working spaces into your HMO properties moving forward, which will help future proof your HMO portfolio as well.
2. Well Equipped Kitchens and Communal Spaces
Students are starting to expect more from their properties, and well-equipped kitchens and other communal areas have become very appealing. Designing great communal spaces can create a better feeling of community, and I’ve found that adding breakfast bars have been particularly popular in a number of our recent projects.
3. Functional and Practical Space Saving Solutions
Within your HMOs, maximise space where you can and provide easy solutions for students to be able to stay organised. University students have a lot on their plate, so it’s important they have the right space to fit with their lifestyle. If the property is tight on space, try to create multi-use areas where possible.
4. Appealing Designs and Specifications
With competition increasing quickly in the student HMO market and as students are wanting more out of their properties, well-designed, high specification HMO properties can make your property stand out above the rest of the competition. With my student HMOs, I want prospective tenants to look at photos of the property online and be sold before they ever step foot into the house.
5. Energy Conscious Solutions
It may be worthwhile to consider investing in energy-efficient improvements for your HMO properties. Many people, particularly young people, are wanting to live more sustainable lives. A HMO with a better EPC rating or more green features is likely to be more attractive to those who are energy conscious, which could create greater demand for your property.
6. Low Maintenance Outdoor Space
Across the board, people are looking for access to outdoor space in their homes, especially in the wake of COVID-19. But for students, it’s particularly important that the outdoor space is low maintenance and doesn’t require much time and energy to maintain. This allows them to enjoy the outdoor space without having to worry about doing much to maintain it.
Overall, the student HMO market comes with extensive benefits for both landlords and tenants, and it’s by far my preferred method of property investment. If you create a high-quality HMO that provides good value and the features students are looking for, this will help you see even more success.
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About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!