Private property tax hike: Capping rent prices ‘does not work,’ says Boris Johnson, as students face soaring rents

‘Student accommodation currently takes up 95% of the maximum amount of finance available for a student, which leaves them with an impossibly small amount of money to live on,’ says NUS

(Christopher Furlong/Getty Images)

Students are facing higher rents in years to come as the chancellor’s decision to include an extra three per cent stamp duty on buy-to-let properties will force landlords to transfer the costs to tenants.

In a report carried out by AccommodationforStudents.com - before the Autumn Statement was revealed last month - landlords warned that new policies which would “add expense” would ultimately end up being “passed onto the tenant.”

The report also revealed that landlords to student tenants were already planning to increase rents in the upcoming year by at least between one to ten per cent.

Shelly Asquith, NUS director of welfare, described how students are already being “forced to live in poor conditions and pay soaring rents,” adding: “So if extra costs from buy-to-let policies are passed on to tenants the situation will only worsen.

“The problem is particularly bad in London, where students are facing the highest rents.”

Director of AccommodationforStudents.com, Simon Thompson, told the Independent it is “difficult to predict” what will happen the market, but a real possibility is that the supply of the accommodation that students heavily rely on could potentially decrease in the wake of the new policy as “new entrants to the market may be deterred from investing.”

He added: “Discouraging investment in property could lead to less private sector rental stock which, in turn, would put further upward pressure on rents and make life tougher for student tenants financially.”

Currently, London students pay twice as much as students in Wales, and £30 per week more on average than students in other regions in the UK.

Roland Shanks, of the University London Housing Services, highlighted how the buy-to-let market in London was “already in decline,” and told the Independent: “As the gap widens, there is no possibility for landlords in London to cover their mortgages out of rental income.

“This restricts the market to very wealthy buyers-often overseas. The buy-to-let changes will only accelerate these changes.”

Private halls, many of which are owned by wealthy investors from overseas, are a new alternative to London university halls which are normally limited to first-year students and shared houses.

These halls are known to be expensive in comparison to traditional house and flat-shares. With an average rental total of £271.46 per week, a room in private halls in London is 72 per cent more expensive than a room in a shared house or flat.

“Rent controls do not work in general,” said the Mayor of London Boris Johnson when asked how he would help students in London facing soaring rents at the People’s Question Time in Hillingdon last month.

Siân Berry, Green candidate for London mayor is promoting the idea of ‘student living rent’, a scheme that would cap rent rates for students. She said on her website: “Apart from fees and cuts, your living expenses are the new way they are seeking to impoverish and exploit you.

“Student rents I think are the next great scandal.”