Continued growth forecasted for student accommodation sector

New landlord regulation could increase costs

Changes to the Tenancy Deposit Scheme due to increase in disputes

Two thirds of London properties purchased by buy-to-let investors

UK rental figures rise for third consecutive month

The student accommodation sector is to continue to be robust according to Knight Frank, having recorded annual rental growth of +5%pa over the past six years, compared to just +0.6% for commercial property.

With UCAS reporting a +12% rise in university applications and an annual growth rate of +2.5%pa, more students will be looking for accommodation with projections for the forthcoming academic year suggesting at least a further +5% increase in student rents. In addition, the majority of key university towns reported almost 100% occupancy for the academic year 2008/09.

The report stated: ‘ The underlying market fundamentals are positive, with supply restricted and strong demand underpinning rental growth. Given the lack of finance currently available for development and the constrained pipeline, rents are likely to continue to rise for the foreseeable future.’

Knight Frank believes that as an asset class, student accommodation is maturing as a sector and has become to be recognised as a major part of the property investment market.

New landlord regulation could increase costs

New regulations announced by the Tenant Services Authority, that come into force in April 2010, will make landlords work closer with their tenants in a bid to make them more accountable for the services they provide, according to Landlord Assist.

Landlords that don’t adhere to the new regulations could face fines or be faced with having the property management passed onto another company.

Graham Kinnear, Landlord Assist’s managing director, said: “Already there are clear anomalies in the way that landlord and tenant law works. Examples include the fact that a tenant needs to give one months notice to vacate the property yet the landlord is obliged to give the tenant two months notice. Landlords are also prohibited from evicting a tenant without a court order even though they may be out of pocket due to a tenant ceasing to pay the rent.

“Rafts of policy and legislation, which require the landlord to do even more than currently required , are in our view, unnecessary. It may well discourage landlords from entering the market, thereby reducing the choice and quality of rental accommodation available.”

Housing minister, John Healey, stated that the new regulations would help ensure landlords got repairs done right first time, enable tenants to have a say in the management of the property and help prevent antisocial behaviour.

Changes to the Tenancy Deposit Scheme due to increase in disputes

Changes to the method of charging subscriptions for the Tenancy Deposit Scheme (TDS) are to be introduced in 2010 and have been approved by the Board of the Dispute Service.

Subscriptions will now be based upon a fairer basis, to take into account the rise in disputes that have been sent for resolution by scheme members.

John Hornsey, chairman of the board, said: "We are moving to a charge which will be based on the number of live tenancies and with discounts and uplifts to members that will reflect the number of cases referred. We shall base our calculations for subscription increases on this method,"

Under the new system, letting agents registered with the TDS will be able to control their costs of deposit protection and still be able to off-set the cost, as scheme rules allow agents to pass on the costs to their landlord clients. This could most likely increase the cost of subscription by some amount.

The TPS Board noted that the Dispute Service is a not-for-profit organisation and that the substantial rises in disputes would be covered by the increased subscription income and if they were not increased they would not be able to function.

Lawrence Greenburg, chief executive, said: "It is likely that the new rates will be much fairer as they will be set at different levels based on the past history of a firm's demands on Alternative Dispute Resolution."

Two thirds of London properties purchased by buy-to-let investors

According to property research group Molior London, of the 5,500 new houses and flats sold in London between January and September 2009 some two-thirds were purchased as buy-to-let properties.

The figures were revealed by Tim Craine of Molior London at a seminar for those who specialise in the residential development market in the Capital, where he revealed that overseas investors purchased 1,500 of these new residential properties. He commented that overseas buyers have an "important part to play".

A further third were bought by landlords based in the UK, with the majority of the new properties purchased in areas such as Dalston and the Docklands. These areas generally have residents who rent as oppose to buy.

UK rental figures rise for third consecutive month

For the third consecutive month, average rental figures for the UK have risen, according to Belvoir Lettings.

Figures from the report showed that the annualised rental figure had increased from -20.6% in February 2009 (£686pcm) to +10.5% in October with the national average rent being £691pcm.

Mike Goddard, Belvoir CEO, said: “The Belvoir rental index figures for October 2009 shows that the small but significant upturn in rental figures we noted in August and September has continued for a third month, this consolidates the fact that the trend for declining rents appears to have reversed and Belvoir offices across the country are now seeing a steady but and strong upward movement in rents.”

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