Covid-19 Impacts PBSA Valuation
27th Jan 2021
A month into term and freshers' flu has been and gone"¦ well not for Freddie, that guy in the second row from the back of your lectures who continues to sneeze, fall asleep and look worryingly into space as he tries to calculate how much of his student loan he has already spent lapping up the nightlife of Durham whilst nursing his fifteenth splitting-hangover in as many days. If Freddie wasn't troubled enough, it's about now that he would struggle not to overhear his contemporaries gossiping about the fact that "all the houses for next year are already running out", a phenomenon, when aggregated, which prompts the predictable yet unstoppable stampede of chaos that is the Durham house-hunting rush.
By November 1st students are frantically powering up their laptops, mobile phones ready and donning their warmest of winter coats in anticipation of braving the frosty streets to embark upon viewing after viewing to stealthily snap up the student house of their dreams from the fingertips of their unsuspecting lab partner.
This academic year was no different to any other. Students flocked to the Viaduct and City Centre, the StuRents phone lines and website buzzed with excitement as landlords scurried to update their property information and hastened to ask the question "Are students really starting to look already?" A student's excitement at this time of year is only surpassed by their parents', who seem delighted, albeit overwhelmed, to have been roped into helping with their child's house hunt from 300 miles away. Freddie's mum is as eager to hunt down the only remaining 6-bedroom house on Hawthorn Terrace as Mr. Landlord is to put pen to paper and lock-in a fifth successive year-on-year above inflation rental price increase.
November passes and we are already 40% of housing stock down. By end of term, just two weeks later, over 55% of bed spaces have been claimed. Christmas pudding down, a slow start to January is followed by a manic four weeks, which clears the majority of the remaining undergraduates out of the market.
We now find ourselves in the tail-end of April, and the chaos of the last 6 months is a distant memory. The mood has switched from panic to calm and it's hard not to wonder what the fuss was all about? Not least because the Durham student housing market is on the brink of oversupply, and this imbalance only looks set to worsen.
The supply of student bed spaces has increased with the introduction of private student halls and steady investment in the private housing sector in response to the continually attractive yields on offer. As of today, StuRents still has 90 properties available in Durham, for close to 400 bed spaces. In addition to this, over 150 studio bed spaces remain available in private halls accommodation. There is also a chance that StuRents is missing a number of properties from landlords who do not list on the website. Estimating this unaccounted for figure to be 50 bed spaces, the total remaining supply lies in the region of 600 bed spaces.
Making the assumption that all undergraduates have now found their property for the next academic year, this only leaves the postgraduates to fill the void. Making an added assumption that postgraduate numbers will match those of the 2013/14 academic year, official Durham University data would suggest that there will be 3,100 postgraduate students in Durham City next year. During this academic year, the data states that 159 of those lived at home and a further 271 occupied their own home. After taking into consideration those postgraduate students that lived in university-owned accommodation, this leaves just 1150 students to rent from the private sector. Assuming an average post-graduate course length of two-years and adding on the fact that many postgraduates will already be accounted for, it is looking highly likely that Durham will experience its highest rate of vacant bed spaces in some years.
When the November crowds race to secure their prize-property in seasons to come, it's looking like it will be increasingly rewarding to hold your nerve and wait until the later months. Doing so will allow you to pick up a property that is in excess of 40% cheaper than the Durham market average. Now that saving goes a long way in Klute and Subway, Freddie"¦
Image Source: Flickr
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