Friday 12 February 2016
Books Do Furnish A Room
Since 1970 around eight to nine age groups have seen increasing proportions of each cohort disappearing from the labour market. In 1971 the school leaving age went up to 16 and in the last forty five years the numbers staying until later and then going on to one form of higher education or another, or floating on things like gap years has increased.
Certainly, in the past a number left home, but many stayed there, even when in higher education. We do not know the figures. In the towns where higher education was provided, the students were often in halls of residence or such or in multiple occupation lodgings or sometimes flats often provided by the institution or a charity.
In the last decade of the 20th and into the 21st Century in many towns and places, the demand for housing for students has increased immensely. It has become a key feature of the residential housing market in those areas and the increase in provision has very largely been in the private sector.
To a great extent it was provided by local owners both established rental companies and the rising numbers who saw Buy To Let as a main chance way of investing. In many ways student housing not only looked good on the figures but with its natural turnover and identifiable customers had advantages over other sectors.
There have been developments little recognised among the experts in the property market though very recently. That is the big boys have arrived in the student market. Two mentioned to me CRM Students and STUDYINN, Boutique (!) Student Accommodation are present in London and a number of towns.
These are intended to provide accommodation that is satisfactory together often with added facilities for leisure etc. In their larger blocks it is not houses they are taking over and changing, it can be offices, shopping blocks and other properties. So long as it is in the right place, planning agreed and conversion not too costly, it is a very attractive financial proposition.
This means that commercial property is becoming housing implying jobs gone. This is not for families etc. but students and this means student debt. When the debtors finally seek work, possibly, their spending power and perhaps ability to purchase their own home seriously reduced, so needing to rent, they can only rent very likely in an inflated market or return home as some seem to be doing.
Added factors in the property market are increasing demand in the rental sector for a variety of reasons. One is the number of migrants needed to fill the large gap in the labour market left by those who have become students.
Then there are the "investment" buyers, sometimes honest, sometimes not, who prefer to leave the properties empty or little used, perhaps someone with a caretaker function. It has also increased a great deal and more than we think.
This is the way the economy goes and it has become an important part of the increases in GDP and money flows generally. The question is how far is it sustainable and if not when will it bump up against reality. Looking at the picture, could we have a bear market?
But then, when either in student or ordinary rental housing what you do not want is things that go bump in the night.