Falling Student Rents in Portsmouth?

This year there appear to be more student landlords here in Portsmouth with property not yet let than is normal for the time of year, yet the University confirm that there will be an increase in new students (about 1,000) this year and no new halls developments are coming online. How can that be?

Well – one possible solution:  This year we have, say, 12,000 students in private rooms around the city and they are 40% final year, 40% second year and 20% first year (estimate based on the fact that there are halls places for 1^st years and these are always full so we only get the overflow). Next year 60% of our rooms are already taken (current 1^st and 2^nd years moving up a year and staying where they are or moving in with friends in an alternative property). This leaves 40% of rooms empty (4,800 rooms ~ 1,200 houses) some of which will have been taken by the 20% of 1^st years moving out of halls but even if they all had rooms already, that would only be half of the rooms).  So we have between 2,400 and 4,800 empty rooms at the moment and will need 5,000 if the Uni prediction of 1,000 more 1^st years is correct. So we either need 200 more rooms than are in use this year or 2,600 depending on what the current 1^st years have done.

So I’d argue that the letting agent who is advocating reducing rents is panicking and as supply will be less than demand, their action will damage their income and that of their landlords but not affect anyone else and could well result in them losing enough of their landlords to ensure they drop out of the business, which would be no bad thing (just my view).

But there are a lot of suppositions here and when you have rooms empty, it is very hard to sit tight and do nothing until mid-August hoping the rush of 1^st years will be big enough to fill all of your rooms.

In the coming years, I do think the new halls coming in will make it much harder to let properties further out (especially Fratton) and properties that have limited amenities (tumble driers, TV’s, etc) and which exclude many bills – so the alternative to dropping prices is to offer more and that need will increase in future years, so if I had any empty rooms, that is the path I would be considering.