Universities in England will be able to charge tuition fees of up to £9,000 per year from 2012, as the government transfers much of the cost of courses from the state to students. This has resulted in 15000 less applications to university’s across the country inevitably impacting the demand on student and shared housing.
The association of residential letting agents has told its members. “Landlords in university towns must be prepared for the potential effects of the increasing financial burden being placed upon students, there will be less overall demand, therefore in some areas there will be less competition for properties, meaning a more proactive approach is required to secure tenants. Secondly, with student budgets coming under increasing pressures, value for money will be more important than ever before.”
But the question is how will Oxford be affected? A study by SKOPE, a research body based at Oxford and Cardiff universities, suggests that the recent increase in tuition fees has encouraged greater numbers of students to apply to ‘elite’ universities. The paper argues that this is due to a determination among pupils to get better perceived value for money in higher education. Oxford University claims to have seen no real effect this year as a result of the tuition fee increases a spokesperson for the University confirmed “Applications to Oxford have remained steady at just over 17,000 over each of the last three admissions rounds, and I believe Cambridge has seen a similar pattern.”
Oxford Brookes does claim to have seen a reduction in application and this year for the first time in 6 years they have offered places through clearing, however due to the popularity of the university as a second choice and the competition for clearing places intake to the university has still increased despite the fewer applications.
So as far as the demand as a direct result of tuition fees effecting the market I think the impact will for the time being be minimal. Only time will tell if other factors effect demand it is likely that students may decide to study closer to home so they can save on living expenses and with the large amount of permitted student development that has popped up over the past year more students may remain in university accommodation/ serviced apartments reducing demand on HMO houses to the student market.
So far from a letting point of view demand for HMO’s in Oxford has been higher than ever this year. The combined effect of the cap on the number of permitted HMO’s in prime locations brought in by the Article 4 directive and landlords deciding to let to family to avoid HMO licencing fees has seen the biggest shortage in housing stock we have ever witnessed.
Despite this reassuring news there are still a number of houses offered to students and sharers that remain empty. Over the past few years the average standard of accommodation in this market has improved dramatically as landlords realise that the greatest returns comes from offering high quality housing as the achievable rents have seen huge growth with many tenants now happy to pay over £500pcm. Landlords must ensure continued inward investment in their property to remain competitive and be careful not get left behind in this ever developing market.