Government spending review and impact on Student Landlords??

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    Government spending review and impact on Student Landlords??

    I have a few student houses in the North West and interested in views on whether the government spending cuts and increased student fees are likely to have a negative impact on student landlords. Will more students study from home resulting in oversupply of student accomodation? Will additional student loans cover the increased fees and student numbers will continue to grow ? Will lack of employment prospects continue to drive demand for further education and associated accomodation ? Clearly there will be many regional variations but interested in overall views.

    It's impossible to predict whether the hike in tuition fees will depress the number of British students applying to study here; most of the students affected will not be applying until this time next year. I teach sixth formers and a few of them are saying they won't be able to afford it and will get a job instead. (I suspect when push comes to shove they won't get a job and the lure of student life will prove too much). I also suspect that when the dust settles and students do the sums, they will discover that over their working life they will not in fact be significantly worse off than they they would be under the current system, because of the way the repayments will be structured. I am not condoning the fees - I think education should be free - I'm just making the point that way the increase has been presented to us has been a disastrous own goal on the govt.'s part, as the reality will not be as bad as we have been encouraged to think. It's usually the other way round, isn't it?!. For example, compared with a teacher qualifiying this year, an NQT from 2016 onwards, having completed a degree course + PGCE (so, four years' worth of loan + fees) and going on to earn on average £32,000 over the 30 years of the loan's life, would be approx £120 per year worse off.

    In the medium term, I think that the number of two-year degree courses will grow; that there will be a small increase in the number of undergraduates who live at home for at least some of their time at university (until their parents seriously get on their nerves/cramp their style and vice versa!); and that there will be a continued increase in the numbers of international students (who pay full whack for their courses and thus subsidise British students).

    In terms of the implications for LLs, it's difficult to say. If I am correct in my 'predictions', and all other things being equal, it shouldn't make a huge difference, except that where two year courses are offered, demand could logically drop by one third - but that slack may be taken up by higher numbers anyway. However, it will vary from city to city depending on (i) whether councils use the new powers granted them to restrict numbers of new HMOs and (ii) whether the universities build more accommodation blocks themselves or (even worse) allow big private property companies to subcontract for this provision. That would doom even more poor souls to live in rabbit-hutch-like flats at overpriced rents and be ripped off left, right and centre.

    It will be interesting to see what happens to rents in London when many HB/LHA recipients are forced out to cheaper properties as the govt's new caps on HB payments come into force. Presumably there will be a dearth of rental homes in satellite towns and a lot of empty properties in London until LLs cut their losses and reduce rents?
    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations


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