What happens to students when landlords disappear?

Students are probably more interested in the size of their overdraft than interest rates. Obviously when they leave university, they’ll have to repay their student loan, maybe take out a loan for a car, perhaps get a mortgage in a few years.

But could interest rates become a more pressing concern?

As the Bank of England interest rate pushes 5.5% – and looks like continuing northwards – people who’ve bought properties to rent to students might be thinking their mortgage is too expensive and their investment is less attractive.

Analysis by HSBC seems to recommend that landlords take their cash out of housing, and put it in normal savings accounts or ISAs, where the returns are more favourable.

Their buy-to-let property isn’t likely to be making them much money month-to-month, and they’re hoping house prices continue to rise. But this is unlikely to happen for much longer.

This is leading in one direction: fewer, more expensive, student properties to let. Some landlords will sell up while others will get a better return on their mortgage by putting up rents. Either way, students lose out.

With more campus accommodation not high on the agenda of many universities – including Warwick’s – where are the students going to live when landlords get out quick?

: 24 Jun 2007 17:30 |  Tags: Economics Housing Students |  Comments (2) |  Report a problem