International Students Flock to London, Race for Scarce Housing
(Bloomberg) -- International students are returning to the U.K. capital this month, overcoming pandemic-era hurdles such as quarantine. Their enthusiasm means one old problem for new Londoners -- the capital’s fierce rental market -- has also gotten harder to navigate.
Applicant registrations have almost doubled in the last couple of weeks, said Amelia Greene, a director in the prime lettings team at estate agent Savills Plc. International students recently made up 70% of applicants through property websites for the east London district of Canary Wharf, according to Jones Lang LaSalle Inc. Some agents are finding this swell of interest is starting to push up rents.
“The student market is well and truly back, more so than in 2019. This is the busiest market I’ve worked in and I’ve been doing this for 10 years,” said Lauren Hatcliff, director of lettings at JLL Canary Wharf.
The return of students both domestic and international will come as a relief for London landlords after the pandemic confined many potential renters to online classes at home. With restrictions on socializing now lifted across the U.K., most universities have committed to provide an element of face-to-face teaching in the new academic year. “It almost feels like we’ve got two years’ worth of students all wanting to move in September,” Greene said.
The race for a place to stay has been exacerbated by a lack of suitable properties. Some landlords took advantage of the U.K. Government’s stamp duty tax break, which began to taper off in June, to sell their student lets and other rental properties.
“We’re seeing a real stock shortage at pretty much every price point with a huge influx of students, people returning to the office and international relocation, so we’re getting multiple bids on properties starting to push rents up,” Greene said.
“The high level of demand has quickly driven rents up open market by 15% in the past two months and they are now close to their pre-pandemic levels,” said David Salvi, director of London estate agent Hurford Salvi Carr. He said students are showing a preference for apartment blocks with concierge and other facilities.
Many international students are having to sign contracts, and even pay 12 months of rent, without viewing the properties in person first, knowing that if they wait too long they’ll likely be snapped up.
“There’s a lot of video viewings, WhatsApp viewings, Facetime viewings -- it’s becoming more common for people who aren’t even in the country. The market’s so fast paced,” Hatcliff said. “It was quite rare before.”
Affluent areas surrounding Imperial College London including South Kensington, Sloane Square and Earl’s Court are proving popular with overseas students, according to Ed Phillips, chief sales officer of Foxtons Group Plc’s letting business.
“It’s a case of you snooze you lose,” Greene said. “It’s a perfect storm in that there’s a shortage of stock and a high volume of applicants all at once.”
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