The Renters’ Rights Bill’s impact on student housing: an update

The Renters’ Rights Bill (which succeeds the Renters (Reform) Bill issued by the previous government) has now passed the committee stage in the House of Lords.

The Government states that it will “transform the experience of private renting, including by ending Section 21 ‘no fault’ evictions” and “give renters much greater security and stability so they can stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness”.  As with the previous incarnation, there are reported concerns from student landlords as to the impact of this on the student housing rental market given the narrow window for lettings between academic cycles.

Two major concerns over the abolition of Assured Shorthold Tenancies as applied to students are that:

1. To have an effective student lettings market, property must be available for each academic year; and
2. Any property voids after the academic year are hard to fill until the next academic year.

In its current state, the Bill goes some way to address the first concern:

1. Universities are still able to rely on the exemption in paragraph 8 of Schedule 1 of the Housing Act 1988 for lettings to students by “specified educational institutions”;
2. Universities will also benefit from a mandatory ground for possession (ground 4) which is designed to enable letting of student accommodation to non-students in the short term (e.g for summer conferencing);
3. The guidance to the Bill states that “Purpose-Built Student Accommodation (PBSA) will be exempt from these changes as long as the provider is registered for government-approved codes, since these tenancies are not assured”. The Lords have amended the Bill to allow the Secretary of State to make regulations to specify classes of student landlord, or student building, which will fall outside the new legislation so that PBSA providers will be able to grant common law tenancies without the protections offered to assured tenants contained in the Bill.
4. There is also relief for houses in multiple occupation (HMOS) let to students with a new mandatory possession ground (ground 4A) designed at “facilitating the ongoing yearly cycle of short-term student tenancies”. This ground enables landlords to gain possession of houses in multiple occupation let to full time students in order to relet the property again to full time students. Importantly, landlords must ensure that prior to granting the tenancy, the full time student tenants are given written notice of the landlord’s intention to use this ground for possession.

The Bill weakens the landlord’s position on the second concern from the earlier draft by reverting to a minimum notice needed to end a periodic tenancy to two months. The risk to student landlords unable to rely on the exemptions above of this short notice period is:

1. Students will time their exit to their last exam leading to income voids over the summer; and
2. Students who decide a course is not for them may leave in the Michaelmas term leaving a potential void (or part void in an HMO) for the remainder of the academic cycle.

Universities will be concerned that the void risk will lead to increased student rents from landlords either to the mitigate anticipated void risk or as a result of a paucity of accommodation as landlords migrate to other sectors less affected by cyclical voids. 

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