Lockdowns and travel restrictions imposed by the UK and other international governments are stopping many international students from coming to the UK.
According to Chestertons, one of the largest lettings agents in London, this is having a big impact on the London rental market and is one of the reasons why rents have fallen between 10% and 15%.
Over the past 10 years, the student market has become increasingly important to London landlords, especially in central London where Chestertons estimates that in the summer months between June and September, 30% of its tenants are international students with generous budgets.
This figure is even higher in the areas most popular with international students and locations around major universities, such as Bloomsbury, Camden and even Knightsbridge.
However, Covid-19 has had a dramatic impact on student demand this year with one report estimating there could be a 50-75% drop in students as a result of coronavirus.
The number of student tenants housed by Chestertons in the first six months of this year was 48% less than the same period last year.
With lower demand from these students, there are currently more rental properties available on the market and, as a result, rents have fallen by between 10% and 15%.
Richard Davies, Chestertons Head of Lettings, said:
“The lack of students in the market is definitely one of the factors behind the current over-supply of available rental properties, especially in central London locations, which has led to a fall in rents.
“However, with travel restrictions from many countries lifting and with two months of the peak summer lettings market to run, we could see many students returning and rents recovering.”
There were an estimated 375,000 higher education students in London in the 2018/19 academic year according to the Higher Education Statistics Authority (HESA), nearly one third of which were from overseas.
With tuition fees for overseas higher education students ranging from £10,000 to £58,000 a year, international students will typically come from wealthy families with larger budgets for accommodation.
The parents of international students will often want their children to live in Central London, as that is the area they are usually more familiar with and generally see it as being safer.
Security, proximity to the college and quality of accommodation are also paramount and furnished properties are generally preferred to avoid the hassle of buying locally or importing from home.
Currently, universities are preparing for all eventualities, with some offering online courses while others plan to keep campuses open but operate within strict distancing guidelines.
Many of the larger colleges in London such as Imperial, LSE, King’s and UCL have announced plans to be open and ready to teach online and in person at the start of the new academic year in September 2020, with enhanced safety measures.