I was very interested to read about a number of good sized co-living developments being planned for Dublin and, particularly interstingly, Dun Laoghaire.
The company involved, Bartra, quote a clear definition of their young, target customer. From a business point of view that seems very smart, and probably works best for these larger developments. Personally, I believe co-living has many markets, and a lot to offer many different types of people. It may even be that coliving is at it’s best when embracing diversity within shared environments.
“Critics round on No 10 over ‘ridiculous’ rules for 14-day quarantine”
I have yet to see any mention of the effect a quarantine regime will have on businesses outside the “travel and tourism” sectors.
While it is obvious that those sectors will suffer, there are many other businesses, such as Zetland, our student accommodation in Huddersfield, which will suffer from additional barriers on a market already under severe pressure.
The central problem is the lack of clarity around the effectiveness of the quarantine strategy. It has already become apparent that people under quarantine restrictions will be allowed to use public transport to get to their ultimate destination, and then be allowed to go out to shop and fulfil legal obligations. So how effective will it be?
My personal view is influenced by our position of course. I try to be as impartial as possible but I can’t get past the argument that if the general public are obeying goslings and exercising good social distancing, and in particular if those inbound passengers were compelled to use the ‘test and trace’ app, then they actually represent very little additional risk.
One thing’s for sure, almost everyone is having it tough but, generally, we are all ‘pulling together’ to navigate these difficult times. So is it reasonable for students to be demanding rent reductions and cancellation of contracts? I read this article last week and thought it was worth a short comment.
Landlords are often vilified in the media but I know personally of many very good landlords who, despite zero grants or compensation from government schemes, are making arrangements with tenants who have lost work or been furloughed. Commercial landlords of shops, restaurants and leisure facilities are undoubtedly in for a very tough ride for an extended period. However, in the short term at least, they are able to claim grants linked to Business Rates.
The case for students in HMOs is slightly different. Whereas commercial landlords pay business rates, student accommodation is residential and is liable for council tax. There is no government support at all for providers except the CBILS loan scheme. CBILS is a loan, to be repaid, and subject to arbitrary interest rates after 12 months. Besides, only 1% of applications have been granted to date!
But many students have loans too. Which also must be repaid. Some have also had to work to support themselves and supplement those loans; that work has just gone and they can’t claim UC because they’re full time students. So I can see their point.
However, landlords are not the enemy here. Some of our residents have chosen to go home, some have stayed. We have helped some who’ve left by providing free boxes and tape, and offering free storage, but some have literally just bolted, leaving most of their belongings in their rooms.
Some who have left have paid periods in advance, some have payments due and are asking about the possibility of cancelling their contracts.
We are looking after those who have stayed, keeping in regular contact with each and every one. Cleaning and hygiene management continues, with the full support of the residents. We have installed neat hand sanitisers in the entrances of all flats, so residents, and any required visitors (i.e. for maintenance), can sanitise easily before touching handrails, door handles, etc when coming in from outside. This has been appreciated and helps create goodwill.
In order to keep providing services and protection to our remaining residents we need to keep paying our bills and for the people who manage everything. Some bills may reduce slightly but many won’t – high speed broadband doesn’t get cheaper when only one person is using it. Power and heating is used by fewer people but used much longer, all day and much of the night in fact.
So it is clear this is not a one dimensional situation to be solved with simplistic answers. On all sides, landlords, tenants, councils and regulatory bodies, there needs to be flexibility to find solutions for every case and this won’t be achieved by any single party ignoring the position of another.
As long as all parties act with integrity in cooperative spirit, we can all get through these exceptional, tough times.
The co-living model is developing fast in the USA. There are new entrants all over mainland Europe. And now we see that a German company has secured €1bn to invest in 35 co-living properties creating space for 6000 residents over the next 5 years. The press release states that developments will be located in Austria, Spain, Switzerland and Poland. So what about the UK?
We believe there is another, more agile, way to bring capacity on stream more quickly. To start earning those returns and enable, fast organic growth. To rapidly respond to the changing customer demands. To create a quality, aspirational, socially and environmentally beneficial product accessible to many, many more potential customers. To actively expand the product reach and give local communities decentralised social and economic empowerment.
Properly delivered, co-living has the all qualities to empower genuine social and economic change not just in large cities but everywhere. It is time the UK committed to co-living in a BIG way with vision and ambition.
The Business Proposal is written, the full Business Plan is ‘in progress’, the market is maturing and primed for ‘disruption’. SLK are moving into the co-living arena with our new project(s) and we have ambitions. BIG ambitions (but not BHAGs – and if you don’t know what BHAGs are, consider yourself lucky!).
While researching the current market offerings and defining the niche we want to explode I came across this article from Money Observer which offers some encouragement to investors who are looking at co-living and thinking “is this a space worth serious consideration?”.
I hadn’t read this article before preparing our Business Proposal but many aspects of it are exactly the things I’ve said. It’s really good to have some confirmation we’re on the right track with our ideas. After a bit of a public hiatus (we’ve been working furiously out of sight!) we will be much more visible from now on. Watch out – you have been warned!!
A short, interesting article flagging up the very real possibility that Student Landlords will soon be paying Council Tax. To be fair, it is very hard to argue that there should be no Council Tax paid, or that the burden should be borne by the students themselves. After all the recent legislative and taxation changes, though, landlords are feeling very much under pressure.
As those of us who live in this ‘golden triangle’ know, there is significant wealth around these parts. The prime end of the market in particular remains buoyant and shows all signs of maintaining solid growth even should the post-Brexit UK economy take a significant downturn.
This is not only at the luxury end though. All house sale prices remain on the up and Harrogate, in particular, has historically ridden property downturns much better than the city conurbations of West Yorkshire and significant areas of York. ‘Oop North’, everyone aspires to live somewhere around here.
BUT you have to know exactly where is best. You cannot beat detailed, accurate local knowledge when choosing specific strategies for specific properties in which to invest. Buy-to-let yields aren’t as favourable as other areas, capital growth and stability are the key. HMOs won’t work in very specific areas but boutique HMOs will fly in others.
This Financial Times article focuses on the prime market but illuminates any number of good reasons for investing in the ‘golden triangle’ at all levels of the property market. In uncertain times, investment in this very specific area of Yorkshire is increasingly looking a very sensible choice.
I’m having to investigate Capital Allowances on our Zetland House purchase, with a view to exploiting them ourselves on an ongoing basis and the valuation of any future sale.
This is a complex and, dare I say, crushingly dull affair. However, if it saves money, it makes you money and this article has provided me with the most illuminating overview so far. Perhaps the best advice in this article is to get a Capital Allowances specialist in your Power Team.
Renowned property experts Allsop say they are witnessing the exploitation of a gap in the student accommodation market for HMOs – the ‘secondary’ Private Rented Sector market, away from the institutional brands such as iQ and DIGS. Larger scale investors are looking specifically at developing and acquiring HMOs with close proximity, great facilities and, most importantly (what is nigh impossible at redbrick Universities) great yields.
Makes me think North of England. Think Huddersfield? 😉
Two of our Huddersfield student HMOs had conditions imposed on the planning approval requiring the premises only be let to students. Students are exempt from council tax and if we are presented with a council tax bill (which happened recently) we pay the council tax and have it quickly refunded.
For now we are safe, however, in future we know we have to be very careful in the design and implementation of HMOs. Councils seem to have identified a cash cow in imposing a council tax banding on individual rooms, depending on the range of facilities offered to tenants. Yesterday I found this excellent guide on criteria published by Comfort Lettings, which I thought could be a valuable share.