According to the Higher Education Statistics Agency (HESA), there were more than 2.25 million students enrolled in universities and colleges throughout the UK. During term-time, the great majority of these were living in privately rented accommodation.
If you are the landlord of buy to let property, therefore, accommodation for students offers a huge and potentially lucrative rental market.
To protect your property whilst taking advantage of this – as any other sector of the rental market – of course you are likely to look to some form of landlord insurance.
And there you may encounter some difficulty.
Many regular providers of landlord insurance attach conditions to their policies, specifically excluding certain classes of tenant – typically including students.
In the eyes of these insurers, students as tenants may pose a greater risk than other groups of tenants – so cover is either excluded entirely if these are your tenants or premiums include a penalty charge. Reasons for such insurers’ behaviour may be prompted by the belief that students:
- are generally on much lower incomes than other tenant groups;
- their lack of funds may lead to a greater propensity to fall into arrears;
- a general immaturity may mean that students are less reliable tenants and more prone to cause damage and breakages to the let property and its contents; and
- it might even be argued that the party lifestyle which some people believe the typical student enjoys may cause nuisance problems for neighbours of your let property.
Whatever the reasons – whether you consider them fair or otherwise – getting landlord insurance when you are letting to a student population may prove difficult.
Unlike many other insurers, there are certain providers who specialise in student landlord insurance – with policies which put up no barriers at all to tenants who are students, or indeed drawn from any other type of tenant (such as those in receipt of DSS benefits).
Just as with any other type of landlord insurance, that which is specifically designed for student tenants may include the condition that you exercise reasonable care when selecting your tenants, in advance of concluding any tenancy agreement.
For your further protection, some – but not all – of these specialist landlord insurance policies for student tenants may also include as standard cover against malicious damage caused by your tenants or their visitors.
Typically, of course, these precautions include getting at least one written character reference on any prospective tenant and also conducting a credit check on their financial status.
With students, of course, that credit check may prove more than usually difficult since many students may not yet have had time to establish much or anything of a credit history.
In those cases, you might want to consider requesting that any tenancy agreement is backed by a guarantor provided by the prospective tenant, who undertakes to pay the rent – or any shortfall in the rent – if the student tenant allows such arrears to develop.
Thus, specialist student landlord insurance may provide the safeguards you need when letting your premises to students, whilst you take the normal range of checks to establish – as far as possible – that the tenancy is likely to be filled responsibly and with due respect for your property.