Students are not the first target group that springs to mind for developers. But in these shaky market conditions they represent a solid tenant base. In the run-up to Easter, undergraduates arrange their housing for the following academic year. Negotiations between friends may become fraught, as may phone calls home, during which worried parents are urged to part with sizeable deposits to secure rental properties that they have never seen - and which will not be lived in for a further six months.

There is little a landlord or managing agent likes better than the signature of a parental guarantor on a tenancy agreement. This near-certainty of payment is why the student rental market is seen as a safe bet. And with students signing up six months in advance, yields can be predicted with more foresight than in the regular lettings market.

The UK's biggest student housing website, accommodation for students.com, reports that student rents have increased by 19 per cent over the past five years and by 1.5 per cent in the past year; £62.40 is now the average student rent per week in the UK. In light of the fluctuations over the past 18 months in the wider rental market, an increasing number of mainstream landlords may now tailor their portfolios to a specific part of the market, such as students or the elderly.

While the annual supply of students is fairly recession-proof, the constancy of the student market may be less stable than it appears if the findings of the UK Youth Parliament's recent survey are to be believed. Thirty-six per cent of the 1,000-plus young people surveyed said that the recession would influence their choice of university, perhaps causing them to pick one near by that would enable them to live at home.

Source: Time Online
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