Blog: Renters' Reform Bill Spotlight: Student lets
What do the NRLA Renters’ Reform Bills proposals say about student landlords? What will happen if a student leaves mid-tenancy? These are just a couple of the questions coming in from members, following the publication of our Renters' Reform Bill proposals. Here campaigns officer Alexandra Williams takes a deep dive into the issues surrounding conciliation and court reform and how the NRLA believes our proposals could operate to benefit landlords and tenants.
The Government is committed to abolishing Section 21 repossessions - so-called ‘no fault’ evictions, and reforming grounds for possession as part of their plans for the upcoming Renters’ Reform Bill. However, we do not have a clear timeline for when the Bill will be published yet.
The NRLA released its proposals for the bill last year, calling for clear and comprehensive grounds for possession, court reform and a lifetime deposit system.
We proposed several reforms to mandatory and discretionary grounds for possession. One of these grounds which we’ve had many questions about from our members is the proposed mandatory ground for student tenancies.
NRLA members have raised concerns about whether the government will treat landlords and the private rented sector as homogenous in the upcoming legislation.
We know student tenancies are a unique part of the sector which needs bespoke consideration. To reflect this, our proposals and lobbying for this part of the sector will focus on making the case that student landlords need to be able to reliably gain possession so they can fill their properties at the start of each academic year.
What are the NRLA proposed mandatory grounds for possession in student tenancies?
The association is proposing that the tenancy is fixed term, for a term not exceeding twelve months and:
- Not later than the beginning of the tenancy the landlord gives notice in writing to the tenant that possession might be recovered on this ground
- The property was let out by an educational establishment or to an entire household in full-time education.
The notice period for this ground would be two months.
What is different?
The difference between this and the existing Section 8 ground we have now, is that the existing ground is limited to educational establishments and not normally used as - currently - Section 21 is available.
The NRLA proposes revising this ground to allow for all student tenancies to continue to exist as fixed term tenancies, including those provided by private landlords, and for landlords to recover possession at the end of the agreed term with certainty. This allows student landlords to continue to run their businesses along the existing model.
What happens if a student leaves mid-tenancy?
We cannot say for certain how this would work under the new legislation, as we have not seen the Renters’ Reform Bill yet. However, our proposals are based on the situation at the start of the tenancy. As long as the property was let out to an entire household in full-time education then the ground would be usable even if someone dropped out midway through.
Why does the student sector need different proposals compared to the rest of the Private Rented Sector?
The NRLA proposals intend to reflect both the demand of students who need housing in September and the security needed for landlords who are working in a very specific market within the Private Rented Sector (PRS).
1 Fixed terms are essential for maintaining supply: The student market is unique in that it has a very specific window at the start of the academic year where tenants are interested in moving into a property. Because of this, landlords who provide homes for students need to have confidence they can provide a vacant property every September. Without this, landlords would be forced to fill void periods by letting to other markets such as young professionals or families, shrinking the available properties for students.
2. Students need certainty around council tax: A household that is entirely made up of students is exempt from paying council tax but once one tenant leaves university then the tenants have to pay council tax. If landlords cannot regain possession at a specific point in time then at some point these students will become young professionals and liable for council tax. For courses like medicine which last longer, or where the students are from different years, this could lead to students paying council tax they would not normally have to. Linking the length of the tenancy to academic year allows everyone to reassess their circumstances and who they want to live with before this happens.
3. It's hard to switch between student lets and family lets. If landlords do miss the window to let to students then they must find someone else to provide a home for. In some areas of the country, and often in student areas, once landlords do offer the home to a family instead, then it may be impossible to change back because of ‘Article 4 directions’. Where such a direction is in place, if a landlord switches from renting a house in multiple occupation (HMO) to letting to a single family, this changes the planning use of the property. Once this happens, the landlord cannot switch back to letting to students without the council’s permission, which is usually refused. As a result, missing the window can mean losing homes for students long term.
If you would like to engage with us further on our proposals and want share your feedback on our proposals you can via our campaign page.
Our research team has surveyed student landlords on the impact of Covid-19 measures, the results of which can be found here.
Keep an eye out for more articles spotlighting different parts of the Renters’ Reform Bill and the NRLA proposals over the coming months.