House Hunting in Bradford - Initial Conclusions from the Summer of 2009

Introduction

The letting season still has about two weeks of activity to go and the Unipol web site is moderately active with an average of about 400 searches a day taking place.

SUMMARY KEY POINTS

• Some large developments have substantially discounted rents to directly compete with the off-street market with the lowest rents in complexes at £50.00 a week compared with £54.00 in off street properties
  
  
• Off-street properties are letting later and of the properties already let a higher proportion are in larger developments
  
  
• Off-street properties will feel the brunt of the number of surplus rooms in the market
  
  
• There is a surplus throughout the market and there are currently 596 unlet bed spaces in larger developments and 470 unlet rooms on Unipol's website.
  
  
• Letting activity almost the same as in 2008 (2% down at the end of August)
  
  
• There is an increasing need for short term lets over the summer and from international students who wish to stay in Bradford from September to December to wait for graduation
  
  
• There will be around 600 students (11% of the market) still looking for accommodation.

Complexes v Off Street Properties

By the end of August 2009, 923 bed spaces had been advertised in off-street properties, slightly down on the 1,119 in the same period in 2008 (a 17% decrease).

This has been matched by an increase in bed spaces from the larger complexes from 697 in 2008 to 1,436 in 2009.

Some large developments, particularly CRM, have substantially discounted rents on some of their rooms to directly compete with the off-street market and are doing so very successfully. The lowest rents in complexes (inclusive of water, energy and internet and comparing like with like) are at the very low level of £50.00 a week and this compares with the lowest inclusive rents in Unipol Code off-street properties of £54.00.

There are some larger developments in Bradford that are not members of the Government Approved National Code and it should be stressed to students that they are best avoiding these properties.

Off-street properties are letting later, and of the properties already let, a higher proportion are in larger developments, suggesting a shift towards the use of complexes and away from off-street properties who will feel the brunt of the empty rooms in the market.

Lettings

There was a slow start to the year but by August 2009, with an increase of 36% on bed spaces displayed on the web, letting activity is catching up and is now only 2% down on the 2008 level with 60% of bed spaces displayed being let.

Bradford continues to see a ‘slow burn’ scenario with many students in Bradford leaving their house hunting until later in the season, probably to avoid paying for accommodation over the summer period. It is likely that there will be a small surge in demand as returning students arrive back in Bradford and house hunt in mid September.

Rent Levels

Rent levels are complex and the annual graph showing real rent comparisons from the larger developments remains the best way of looking at those rents.

The average rent level for off street properties has remained quite consistent across the year and is currently £45.26. This compares with an average rent in 2008 of £43.25 and £43.67 in 2006. As the house hunting season gets later rent levels traditionally fall and the current average rent for an off street Unipol Code house is £43.61.

General Observations

Students looking for a house in February generally had a good idea of where they wanted to live and had already formed in to groups. In the last few months the majority of students that came in to the Bureau looking for housing were students from overseas who needed additional support and guidance.

The student housing market in Bradford is increasingly challenging, especially for the off-street property provider. It is important for students to have access to as wide a variety of accommodation as possible.

Short Term Summer Lets

Over the summer period there are a significant number of students who need short term lets over the summer and a separate group who need to secure accommodation from September to December to wait for graduation. Unipol now has a special needs section on the website, which helps direct students needing short term accommodation and owners can indicate on their adverts if they are prepared to let on a short term basis.

Current Demand

Unipol estimates that there will be around 600 students still looking for accommodation in Bradford out of a market need of 5,486 (2,066 in complexes and 3,420 in off-street properties). 11% of the market therefore remains to be let.