Student rents up 3.1%
Figures from specialist student accommodation website Accommodation for Students suggests that the average rental value for student accommodation has risen 3.1% from £77.04 per week per bedroom in 2012 to £79.42 in 2013. This average rise appears to be driven by soaring rents in the south.
Based on rents on more than 125,500 properties in 92 locations, their research shows that London has the highest average rental value of £129 per week, followed by Egham at £115. The third most expensive location, Newport, has seen this year’s biggest hike with rents doubling from £56 to £113. Winchester and Middlesex both have average rents over £100 per week.
In some of the country’s most popular northern university locations, including Manchester (£74), Leeds (£74), Sheffield (£69) and Nottingham (£76), rents have stayed the same or even fallen. However, there are some exceptions such as Middlesborough, which has risen by 18%, and Salford, up 15%. This year’s best value locations for student rental accommodation according to these figures are Walsall, Stockton and Wolverhampton with average weekly rents of £48, £49 and £52 respectively (pictured above is a room to rent in Wolverhampton for £58 pw in Park Hall Road).
Many of the highest increases are in the South with Luton up 20% from £71 in 2012 to £91 in 2013. Chatham, home to the University of Kent, has seen its average student weekly rent increase 19%, from £73 to £87, Bournemouth is up 16% to £90, and Bath and Southampton have also seen 10% rises.
Simon Thompson, Director of Accommodation for Students said: “The student accommodation market remains robust and is still one of the most attractive yield classes for property investment. We are still seeing large scale development in student accommodation up and down the country.
Demand for places at well renowned academic institutions is clearly having an impact on student rents but with reports that some universities are offering incentives as a way to fill spaces and entice the brightest students – from generous scholarships and bursaries to laptops and gym memberships, it will be interesting to see what impact this has on future accommodation demand and subsequently rents, in such locations.”
Mansion tax plans could affect 775,000 homes over 25 years
An assessment of the proposed Mansion Tax by Knight Frank suggests that its revenue targets will not be met at the current proposal for a £2m threshold and that in order to raise the targeted revenue, the value threshold for the tax would need to be reduced from £2m to either £1.5m or £1.25m. The tax would be levied largely on London and the South East of England where 86% of all £2m+ properties are located.
Liam Bailey, Head of Research at Knight Frank, said that assuming historic rates of property price growth, the number of properties affected by the tax will increase from 55,000 homes – currently worth £2m – to 775,500 over the course of the next 25 years.
“Our calculations point to the real threat of the mansion tax threshold being lowered substantially in order to meet the revenue targets of the political parties,” he said. “Even if the threshold is not lowered, it seems a fair assumption – given that it has remained at £2m since 2009 – that it would not be raised in line with future house price inflation thereby substantially increasing the number of properties affected by the tax.
“Over the past 10 years house prices have risen by 69%. Assuming a similar rate of growth in the future, all houses worth more than £1.2m today would be paying a mansion tax 10 years from now, meaning that the number of homes covered would nearly triple from 55,000 to 157,300.”Tagged in: mansion tax, renting, Students
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