“Student accommodation” has never been a sought-out residence for real estate brokers aspiring for big commissions.
Indeed, most graduates looking back on their student days recall, with shivers, an endless parade of grimy apartments, thrift shop clothing, and a diet of beer and breakfast cereal (and we don’t mean the $7 a bowl stuff).
However, in London, a new breed of super-rich students with lifestyle expectations more akin to their billionaire parents’ than the poor coeds’ on 1980s BBC sitcom The Young Ones are changing the face of the capital’s super high-end residential property market.
Not only are they flashing their foreign bank account-linked credit cards in the city’s most expensive restaurants, clubs, and bars, they are willing to pay big for their own luxury version of student housing.
With the new academic year just beginning, London is suddenly awash with super-rich, foreign 21-year-olds who are being avidly targeted by the city’s most exclusive estate agents and nightlife promoters.
Peter Wetherell, whose eponymous agency specializes in sales and rentals in the posh Mayfair section of London, recently rented an apartment overlooking Hyde Park to an American fashion student who is paying £21,000 ($31,755) a month for it. The unit is one of six in the building.
Wetherell is pitching the apartments as “London’s ultimate student pads,” a sign of how dramatically perceptions of renting to students have changed.
“Students living in Mayfair are a world away from everyday U.K. students living in normal digs,” Wetherell explained to The Daily Beast.
“Some wealthy overseas students from the Middle East, North America, Asia, and Africa can afford to pay over £2,000 ($3024) per week for luxurious apartments in Mayfair. These students have a spending power to rival advertising directors and have generous six-figure allowances, which enable them to shop on Bond Street, eat at Scott’s on Mount Street, and enjoy nightlife in elite venues such as Annabel’s, 5 Hertford Street, and Whiskey Mist.”
Figures from the U.K.’s Higher Education Statistics Agency (HESA), show China contributes the largest single group of foreign students, making up 18 percent of all foreign students in the capital.
The U.S. is second with 9 percent, followed by India (7 percent), Hong Kong (5 percent), Malaysia (4 percent), and Nigeria (4 percent).
Wetherell is hardly the only one noticing the trend in ultra-posh student accommodations in London.
Indeed, the Nido Collection, a new real estate start-up, is specializing in high-end London student rentals starting at around £1400 ($2117) per week.
Matt Brereton, of luxury London estate agency Chesterton’s, told The Daily Beast that premium rentals in London are increasingly popular with mega-rich students.
“Many of the top universities and colleges in the world are in London, but going to college here is an expensive business. The spectrum of students coming to study here is vast. It can be anything from the children of Middle Eastern royalty to the scions of huge global corporate families. The sky’s the limit in terms of what they will pay,” Brereton said.
It can be even more profitable renting to the short-term students.
“Many of the students are actually here on a placement or an exchange and won’t be here for the full academic year, maybe just four to six months. On these short-term leases, owners can ask anywhere from 20 to 50 percent above the standard long-term prices,” Brereton explained.
Another attraction for property owners is that foreign students from Africa frequently pay all the rent up front in cash.
From 2004-2007, Sophia Money-Coutts, features editor at British lifestyle magazine Tatler, studied at LSE—the natural home of the super-rich foreign student in London.
“There were certainly plenty of Arab sheiks’ sons and Chinese princelings when I was there. The money was quite amazing,” she recalled to The Daily Beast.
“On weekends, when the parking restrictions didn’t apply, the road outside the library was full of badly parked Maseratis, Range Rovers, and Porsches. They never live in the student halls of residence. One Egyptian friend had a stonking great penthouse in Chelsea. That is fairly standard for that crowd,” Money-Coutts said.
“I went for dinner with a bunch of them at Zuma in my first year and spent a large portion of my student loan that one night.”
Some of the most popular nightspots for these temporary residents, according to London concierge service Quintessentially are: The London Edition, La Bodega Negra, Zuma (as Money-Coutts mentioned), and Nobu.
A report published earlier this year from PwC and London First found that foreign students in London contribute a whopping net gain of £2.3 billion ($3.48 billion) a year towards the U.K. economy. And they may be spending quite a bit on their entertainment and nightlife.
Quintessentially said the business has definitely seen an upswing in wealthy students using their services.
“Students are a rising trend for us, simply because London is a global center of excellence when it comes to education. A lot of the students are from emerging market countries or Africa, and when they arrive in London they have no idea, so they need help navigating the city,” Edward Taylor of Quintessentially told The Daily Beast.
Considering these students’ massive bank accounts, London businesses are more than happy to lend a welcoming hand.