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Property demand being fuelled by mature students

Tuesday, 14 April 2009 4:35 PM

Mature students are demanding rental property as many return to education due to the current economic climate.

Buy-to-let mortgage specialist Paragon Mortgages, have said UCAS figures show a 12.9 per cent increase in applications from the 21-24 age group, with an overall increase in student applications of 464,167.

Paragon have said the weakening employment market has done much to create this trend, and will spell out good news for the buy-to-let market, which relies heavily on student lettings.

John Heron, managing director of Paragon Mortgages, said: "If individuals have been made redundant or are struggling to get a job they may see higher education as an attractive option.

"As universities expand, demand for good quality accommodation also increases, which should filter through to rental income. More mature students may also be prepared to travel further to get to university, so may look to rent property away from the main student locations, therefore boosting demand more generally."

Paragon claims student landlords typically have lower void periods than the wider buy-to-let market, with the benefit of an annual let and a parental guarantee. Rental income per property also tends to be higher as landlords typically let to students on a per-room basis.

The mortgages specialists have also found those landlords who have student accommodation in their portfolios typically have an average one per cent higher income than those who don't.

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