A recent report in the Sheffield Telegraph indicated that an influx of foreign students is forcing up city centre rents. Is this a Sheffield phenomenon? I suspect not. The foreign students that descend on our shore each year it must be remembered are often the offspring of their countries elite. In previous decades the huge disparity in wealth between the west and emerging countries such as China and India meant that even the affluent struggled to bridge the costs between their own country and the west. No longer. Looking at rents and property prices in Shanghai or Mumbai, Sheffield along with other UK cities probably seems a snip! I must add that I know landlords that have let to foreign students and that their experience is that they have been exemplary tenants. I have also heard of horror stories.
The Sheffield Telegraph reports that a one bedroom apartment in the city centre that would have rented for £500 in 2008, rents now for £555 and at this time of the year the same Sheffield rental property could achieve £595 with the extra demand from affluent foreign students looking to rent in the city.
Landlords looking at renting to foreign students have one potential risk as far as I can see. For UK based students it is always advisable to obtain a UK based guarantor. However, this will not be possible for a foreign student. Even if the students parents were prepared to sign a guarantor agreement enforcing it through UK law on individuals living under a different countries jurisdiction I would imagine would be practically impossible.
Therefore the landlord's dilemma is that they may get higher rents but if the tenant decides to leave or gets chucked of the course and fails to pay the rent or damages your buy-to-let and then gets on a plane to Beijing then how are you going to get your money back? The only true safeguard I can see is taking a very large deposit and payment up front for the whole rental period.
I'd be interested to hear other landlords experience of renting to foreign students.
Landlord insurance - specialist student landlord cover