Renters Reform: Action needed on student lets
NRLA warnings that ending fixed term tenancies for student lets could decimate the sector are gaining momentum – with the association to continue to lobby Government for change.
The Renters (Reform) Bill, published last week, outlined proposals to end most fixed-term tenancies, including those currently offered to students in the private rented sector to cover the academic year.
The Government claims the move will strengthen tenants’ rights, however student landlords say introducing indefinite periodic tenancies will render their business models unworkable, making it near-impossible to operate in the market.
To add insult to injury the Government has exempted purpose-built student accommodation (PBSA) from the new rules, meaning that in high-end build-to-rent ‘halls’ and apartments bosses will still retain the right to use the fixed term.
What is the scale of the problem?
There are currently around 850,000 bedspaces for students in the PRS, vital when it comes to housing the 1.6 million students who need accommodation at some point during their studies.
Currently students typically sign contracts covering 12 months of study, meaning both parties know when the students will be moving out.
This allows the landlord to market the property to prospective tenants, and students to secure accommodation following academic year ahead of time.
By giving students the right to remain indefinitely, landlords would have no guarantee that their property would be free to rent at the start of the next academic year, making it impossible for them to find new tenants – and making it increasingly harder for new students to find somewhere to live.
In Scotland, where similar changes have already been made, landlords have left the sector in droves with many declaring a student housing crisis
According to a BBC report into the issue some students have been using hostels and sleeping on common room floors, with NUS Scotland reporting the crisis is forcing students to quit courses.
Figures released last year showed that by 2025 the UK will face a shortfall of around 450,000 student beds, due to a combination of increasing number of students going to university and a relatively low supply of new student homes, a crisis that will be exacerbated by these proposed changes.
It will also be the poorest that are hit the hardest with rents in Purpose Built Student Accommodation typically up to £120 a month more expensive than the PRS, making it an unaffordable option for many.
Prior to the publication of the Bill the NRLA wrote to universities and student groups across the country to garner support for a move to allow the fixed term for student lets. It attracted widespread support, with a letter to Ministers signed by the NRLA along with Universities UK, the British Property Federation, the University of Cambridge, the University of Leeds, the University of Southampton, Lancaster University, Manchester Student Homes, Unipol, College and University Business Officers, We are Kin and the Young Group.
The NRLA’s campaign is already gaining traction, and was picked up by the BBC this week, with the Higher Education Policy Institute also calling for fixed-term tenancies to be kept for student housing, stating: “We agree with the evidence that not exempting the student PRS could push up rents or reduce the availability of student rental properties, at a time when the market in many university towns and cities is already very tight. We, therefore, recommend that the Government retain fixed-term contracts in the student PRS.”
What happens next?
As the Bill passes through Parliament the NRLA will continue to lobby for positive change specifically around student tenancies, with a meeting of stakeholders planned in the coming weeks.
The Government needs to ensure landlords have the ability to bring student tenancies to an end in order to let them to new students at the start of each academic year and the association is hopeful ministers will recognise this fact, to support both students and the landlords who house them.
The NRLA has a suite of resources to keep members up-to-date with the Bill, including a selection of FAQs. To visit the member-only hub click here. We would also advise you to keep a close eye on our news site and social media channels where we will provide regular updates on all the latest developments.