The COVID pandemic and the draconian lockdown measures which were introduced in March 2020 constitute the biggest peacetime disruption to the economic and social fabric of the UK in our history. Virtually everything we know and do, where and how we live, has been negatively impacted – including student accommodation. Education at all levels has been seriously compromised, with hastily assembled virtual and online alternatives introduced to provide some kind of continuity, not to mention the unprecedented cancellation of A-Levels and GCSEs.
Tertiary or higher education has suffered badly. But the difference here is that, unlike the school system, the university sector both relies on and supports a substantial co-dependent economy. Perhaps the hardest hit participants are those who provide the accommodation for students that goes beyond that which the universities themselves can provide and who find themselves in normal times picking up a huge amount of slack. Much has been reported and discussed in the press about the hardship and injustice visited on students whose contractually binding tenancies have compelled them to pay rent on accommodation for which they have little use when lectures are all online and social life has contracted to four walls and a handful of friends.
While it is incontrovertibly true that hundreds of thousands of students have suffered in this way, it would be a distorted view of reality that pictured them as the only victims. The vast majority of private landlords are not corporations or hard-headed opportunists. They are ordinary people who have chosen to invest heavily in property – which is by no means a cheap asset – in order to provide a valuable service at a reasonable, not extortionate, price.
To read some of the coverage over the past year or so, you could be forgiven for thinking that hordes of stereotypically greedy landlords have been busily exploiting students without a second thought for the burdensome conditions of lockdown. In fact, most landlords have been more than happy to reach some kind of compromise that affords them some protection for their income while making concessions to their student tenants to alleviate the harshest excesses of the continuing crisis.
After the government enforced the closure of university campuses early in 2021, students duly vacated their accommodation, and most university-owned halls of residence agreed to early termination without charge. This was financially much harder for private landlords to do yet, despite being under no obligation to follow suit, most have done what they can without seriously damaging their businesses.
Break clauses, rent holidays, early termination, and rent reductions have all been offered and gratefully accepted. Operating on the narrowest of margins already, small private landlords have found ways to shoulder some of the losses that might otherwise have led to rent strikes, breaches of contract and, ultimately, court action.
But the future is starting to look a little brighter. At the start of the pandemic, the Institute for Fiscal Studies feared the worst, predicting a significant downturn in student enrolment. In fact, 2020/2021 was a record year for undergraduate applications and there is no sign that 2021/2022 will see a reversal.
That means student accommodation remains a vital part of the higher education infrastructure. The chaos of the last academic year in which travel restrictions and university closures drove occupancy down as low as 69% made life extremely difficult for landlords. A big part of the problem was the unexpectedness of lockdown, the severity of its effect and the understandable unpreparedness of all parties for the financial and legal implications.
Although the emergence of coronavirus variants continues to threaten public health, the vaccination programme is still the most advanced in the world and is breaking the link between infections and hospitalisations. That means the government’s ‘cautious but irreversible’ progress towards the full lifting of lockdown, although initially delayed, is getting much closer. Students who are due to take up their places for the 2021-2022 year have learned a lot from the experience of their predecessors last year and will be much more realistic and better prepared as a result.
This applies to private landlords too. Revised tenancy agreements will take account of the real possibility of occurrences that were not even contemplated in their customary contracts, giving greater certainty and security for both parties. In addition, rental guarantor services are now widely available, to absorb some of the risks.
The indications are that the academic year of 2021-22 will be something of a bonanza, with high numbers of new students as well as many who deferred or took a gap year in response to the pandemic. The fragile jobs market also means that university is a safer option for the immediate future, and the easing of international travel restrictions should see more foreign students coming to the UK to study. According to UCAS, 30% of first-year students live in privately rented accommodation, which means good news for private landlords.
So although it would be premature to claim we’re going back to business as usual, those private landlords who have survived the privations of lockdown may be permitted to breathe a few deep sighs of relief. It’s time to focus again on the fundamental managerial tasks of being a landlord, picking up where you left off in the digital transformation of the industry.
If you don’t already use property management software then the experts at InventoryBase are the people you need to talk to. Our property inspection app is an essential tool we provide to make the landlord’s life easier.
We appreciate what a tough time it’s been in the private rented sector but the determination and commitment of the UK’s landlords have been exemplary. The industry is now set to bounce back with lettings up and contractual protections improved. Why not add another positive to the list with property management software to match?
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