Frequently asked student let mortgage questions…

Are student lets a good investment?

Student lets are a great investment type. The number of students applying to university in the UK each year continues to grow, promising landlords in this market long-term investment opportunities. This high level of demand means void periods are rare and rent prices are strong. Furthermore, as many student lets are HMO properties, you can expect to earn higher yields than on a vanilla buy to lets.

Do I need a special mortgage to let my property to students?

Many, although not all, buy to let lenders will accept student lets. However, you must tell your broker and lender that you intend to let your property out to students to ensure your mortgage product accepts this tenant type. If not, you risk breaching your mortgage terms and conditions. By working with our experts at MFB, you can be confident that your mortgage suits your property investment plans.

Do I need a special licence to let to students?

Potentially. As many student lets are HMOs, the local council that the property is located in may require you to obtain an HMO licence in advance. If this is the case, your lender will want to see the licence in place or that you have applied for one before they proceed with your mortgage application.

When is the best time to invest in student lets?

Students typically search for next year’s accommodation within their first university term. The academic year in the UK runs from September to July, but research from Save the Student shows that November is the peak month for student searches, and competition for the best properties is high. Therefore, having your property ready to market in time for the start of the academic year will put you in the best position to garner as much interest as possible within this competitive market.

Where should I invest in student lets?

It goes without saying that location will play a key part in a successful student let property investment. Cities and towns with top universities will offer a hub of opportunity for landlords looking to enter this market space. Typically, properties near universities in the North of England will earn you much more competitive yields than in the South or the capital.

Most students want accommodation as close to their campus as possible. Rents charged for properties in prime student locations will be higher, boosting your rental yields. If you’re looking slightly further from the main student areas, be sure there is ample public transport near the property for students to travel to and from their homes.

Should I use a student letting agency?

If you’re planning to purchase your first student let, using a student letting agency can be a great way to help you manage your property. You will have to take into account the added agency fees; however, you benefit from a more seamless and easy process. Your letting agency will free up your time by ensuring students pay their rent on time and will inspect the property for you. You also don’t need to worry about vetting prospective tenants or advertising the property to students directly. Many students will look at letting agency sites, meaning more potential tenants could view your property than if you were to let without one.

As mentioned, the fees involved with using a letting agent can be hefty, and you don’t have to use one for your student let. Agencies can be a great hands-off approach to letting out your property, but you can handle the typical responsibilities of the property yourself.