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Student tenancy deposits and how they work

student tenancy deposits

We’re frequently asked questions about student tenancy deposits; what they’re for, what we do with them and when will they be returned?

In an effort to show transparency and to help answer some of your questions we’ve put together a handy guide to tenancy deposits.

Why do I have to pay a deposit? What is it for?

A deposit is required in the majority of letting arrangements for a number of reasons. At the very beginning of a tenancy it secures your hold on the property, ensuring it cannot be let to anyone else.

At Mistoria Estate Agents, and many other letting agents, the majority of our properties are let out on a room-by-room basis. We therefore ask for a deposit from everyone letting a room in the house. This system protects all the other tenants in the house, as well as us, the letting agents, and the landlord. Imagine if someone you shared with suddenly upped and left! When the next set of utility bills arrive and they aren’t around to pay them, you and the rest of the tenants in the house would be lumbered with covering their share of the costs. Alternatively, the letting agent or landlord would have to stump the cost of the vanishing tenant. Neither scenario is fair and that’s why deposits are taken off each tenant.

Deposit Protection Service

The Deposit Protection Service (DPS) protects deposits for tenancies in England and Wales. It is required by law that all landlords and letting agents put all tenant deposits into a deposit protection scheme.

Tenancy Deposit Protection was introduced in April 2007 as part of the Housing Act 2004 in England and Wales, as a way to raise standards in the lettings industry and ensure tenants are treated fairly at the end of the tenancy.

Mistoria Estate Agents adhere to this process and we put ALL tenancy deposits into a protection scheme for the length of the tenancy. NO DEPOSITS ARE HELD BY MISTORIA ESTATE AGENTS.

Getting your deposit back

In the vast majority of cases, deposits are returned in full at the end of a tenancy. The only time this doesn’t happen is when there are outstanding utility bills to pay or there is damage to the property that is the fault of the tenants.

Property damage

When you leave your Mistoria property, our team will go in and check the condition of the property. If any unreported damage is found, the cost of repair for this may be taken out of your deposit. If the damage is in a communal area, deductions will be taken equally from all tenants’ deposits. If it is a bedroom, the cost will be taken from that tenant’s deposit. No money will be taken without informing the affected tenant(s) first and you will have the right to appeal this decision.

Outstanding utility bills

At the end of your tenancy, which for student tenants is 30th June, there will still be utility bills to bring up to date. As stated in your tenancy agreement, your rent is inclusive of gas, electric and water utility with a cap in place. “At the end of the tenancy the total allowance for the tenancy period will be compared to the total actual usage to establish whether the utility cap has been breached. Any unused allowances within a particular period will be carried forward, or backwards, to offset against over usages of the following or preceding period. Any over usage as calculated at the end of the tenancy will need to be paid back to the landlord or the landlords’ agent within 7 days of submission of an invoice.”

Regardless of the date you choose to move out of your Mistoria property, the final utility bill payment will be divided equally amongst all tenants.

At the end of a tenancy we request final statements from the electricity and gas suppliers. It typically takes six weeks for these bills to arrive, we then need time to check them. Mistoria Estate Agents manage over 300 student properties, and with an average of four tenants per house that’s approximately 1,200 tenant deposits to work through.

We ask that you are patient and allow us a reasonable amount of time to process deductions and return your deposit.

Our tenancy agreement states deposits will be returned within 10 working days of agreement. This means 10 working days after we have contacted you informing you of your share of the final utility bill payments, NOT 10 working days from the end of your tenancy.

At this time we contact the Deposit Protection Service and request your deposit is returned to us. Once the funds are transferred to us we will debit the amount due for your share of the utility bill and return the remaining amount to you.

We hope the above has helped answer some of your questions. Please refer to your tenancy agreement in the first instance if you have any questions and for full details of the deposit/utility bill payment process. You can contact the office on 0800 500 3015 if you have any other specific questions about your deposit that haven’t be answered here or in your tenancy agreement.

Full details of the Deposit Protection Service can be found on their website: www.depositprotection.com/tenant-info. Here you can read about our (Mistoria Estate Agents) obligations as a letting agent and what happens to your deposit. There’s also information about Deposit Disputes and what can be done when you and your landlord or letting agent disagree about the amount of money they wish to deduct from your deposit.

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Demand for Shared Student Accommodation Surges in Liverpool

investment property liverpool

A shortfall of student beds in university halls of residence and student pods (PBSA) in Liverpool has led to a surge in demand for high quality shared student accommodation, up by 35% over the last 12 months, according to The Mistoria Group, specialists in high yielding investment property in the North West.

Demand for shared student accommodation is growing due to rising numbers of students attending the three universities in Liverpool. Last year, there were 60,000 students studying in Liverpool, up 20% on the previous year and it is expected the numbers will rise again this year. It is estimated that 60% of these students require accommodation.

Many universities don’t have sufficient accommodation to meet demand from first year students who usually live in the university’s halls of residence, creating demand for privately owned accommodation. According to Student Accommodation Tracker, only 28% of student accommodation currently meets rising expectations.

Mish Liyanage, Managing Director of The Mistoria Group comments: “There is a very real shortage of quality student accommodation in Liverpool and demand is consistently outstripping supply. The number of student rooms has swelled over the last five years, but their still remains a shortfall.

We have seen a surge in students looking for high quality, HMO accommodation with close proximity to the universities and occupancy across our student accommodation is at 98%. “Shared student accommodation in Liverpool gives investors excellent yields. There are many areas of Liverpool that are ideal for student property investment such as Kensington, Wavertree, Toxteth, Kensington Fields.

Investors can acquire a high quality, three bed HMOs which will house students from £120,000 onwards. An average room in an HMO can be rented for £85 per week including bills, but ensuites can be high as £110 per week. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth).

Student property is the fastest growing sector of the market, giving investors strong returns that are well ahead of standard BTL. The growing numbers of student tenants in Liverpool is driving demand for quality accommodation in the city and this is likely to be a long term trend.

Liverpool is the UK’s top buy-to-let hotspot, delivering investors average rental yields of 8%, once mortgage costs are taken into account. As housing and mortgage costs have the biggest influence on yield, Liverpool takes the top spot, as it has a combination of low average house prices and strong rents.”

 

This story was featured in Property Reporter on 8th September 2017