So-called 'rich kids' sent to London by their wealthy parents are taking over from bankers as the main source of income for agents letting in prime central London's most exclusive neighbourhoods.
Some 41 per cent of tenancies started in the past 12 months have been wealthy overseas students compared to just 21 per cent accounted for by financial services professionals according to research by London Central Portfolio.
It says the number of bankers renting in PCL dropped by a third in the downturn years of 2007 to 2012, and this has not recovered significantly in the past two years. However, wealthy foreign students doubled in number from 12 per cent in 2006 to 29 per cent in 2012, with many more still emerging.
Many have a sophisticated lifestyle. They treat properties with the same care as corporate tenants but the wealth underpinning them is stronger. They can often outbid professional tenants, offering higher rents, often a year upfront, as parents are keen to install their children in the best and most secure homes according to Naomi Heaton, CEO of London Central Portfolio.
Some students will only be renting for an academic year, which contributes to the higher level of new tenancy starts ups by the student population. On the other hand, tenants from the financial sector may extend their tenancies and stay put for a number of years, which remains attractive to a landlord. However, there is always a huge influx in enquiries during August and September for students, replenishing the tenancies.
LCP's survey also reveals that Britons have rented 13 per cent of properties in the past 12 months - the single largest nationality and a surprise, perhaps, given the international focus on the PCL market. They have taken over from the French, the largest nationality for the previous 12 months.
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Comments
Money goes to money goes to money. Always has, always will. These privileged students just have things handed to them on a plate by their rich parents. Do they not want to achieve themselves They're mostly living in locations that are way out of the budget of the majority of Londoners, so I'm not sure how much impact it's actually having, but it seems like another reason for ordinary tenants to be bitter.
Oh to be a privileged teen! Unbelievable that they're taken ahead of professional tenants but I suppose if they can afford it - especially upfront - a landlord would be silly not to accept it.
I've never had any issues with overseas students - They're respectful and they always provide extra information when required including guarantors etc. It's true that some are willing and able to pay a full year upfront and in my experience, they tend to offer at least 3 months upfront to secure their place.
These overseas students have a right to live and study here, they are bringing money into our economy and it would seem they are treating homes with respect - greater respect than your average student anyway. I don't see the problem, who cares if they're rich kids And as for filling housing during a housing shortage, that is up to the government to fix - at least the properties are occupied, unlike many Buy-to-Leave buyers in this country.
Working in lettings in the City, i've dealt with these type of tenants before, and I haven't had any problems at all. From a landlords point of view they make very good tenants because they have a considerably larger budget than the average student, but they usually treat the property well and the rent always comes in on time. Yes, it creates problems with an already constrained housing market, but they have a right to be here so there is not much you can do about it anyways!
Not surprising - if they can pay a years' rent up front any landlord would lap that up.
So as well as foreign investors coming in and buying up properties that they then leave empty, ordinary people now have to compete with rich kid tenants put in place by their wealthy parents. Doesnt seem very fair somehow. Obviously, most of these are going into prime locations where prices are extortionate anyway, but property prices in London arent going to get any better whilst things like this happen. I can understand why parents would want to give their children a foot on the ladder, but what happened to standing on your own two feet