With the Renters (Reform) Bill shortly to have its second reading we are deeply concerned about the effects on the student rental market. The Private Rented Sector is a key part of the student rental market but is being largely ignored by the Bill. Purpose Built accommodation is however to get special treatment despite it providing less than half of student accommodation.
Renters (Reform) Bill - Second Reading Briefing
As a body representing landlords in York, York Residential Landlords Association (York RLA) represents
landlords with substantial involvement in the letting of Private Rented Sector (PRS) properties to
students. Aspects of the Bill will cause substantial disruption to the student-letting market which is
likely to cause as many problems for student tenants as it does for landlords.
About York RLA
York RLA represents landlords in the private rented sector renting in York. As an area with one of the
most active student populations in the UK, around 300 of its members are involved in student lettings.
Collectively they house nearly 6000 students representing some 26% of students studying in York.
The Reality of the Student PRS
While the Bill rightly seeks to crack down on bad landlords and address issues in the PRS, students are
generally very satisfied with their renting experience. Unipol runs a Rate Your Landlord Survey site.
2021 figures show that from over 2500 responses 78% have rated shared housing 4 out of 5 stars or
above, far higher than comparable figures for the PRS as a whole.1
It is often assumed that student
properties are of a poorer standard but due to widespread HMO licensing and increased demands
from students for quality this is largely a myth. The Bill therefore represents a solution to a problem
that does not exist in the student PRS sub-market.
The student rental market occupies a unique place within the PRS. The government appears to
recognise this as the Bill is offering special arrangements for Purpose-Built Student Accommodation
(PBSA). Students need the assurance that their second and third-year accommodation is booked
months in advance for a smooth transition between halls and shared housing. The majority of
students move directly from halls into their shared house. Accordingly, there is huge pressure for
students to form groups in their first year and secure a desirable rental property as early as possible
for their second and subsequent years. Attempts to reduce or eliminate this drive have foundered on the desire of students to secure attractive properties at the earliest opportunity. At the moment,
tenants will sign agreements in both the PRS and PBSA sectors as early as November for
commencement on or about July 1st. Landlords will sign at the same time and both students and
landlord will proceed confident that they have tenants and a property secured. This certainty is
desirable to PRS and PBSA landlords for business reasons but is no less desirable to students who wish
to be able to leave for a summer break with their accommodation for the coming academic year
resolved. For students taking a placement year even earlier certainty is required and these students
often sign for accommodation up to 18 months in advance in readiness for their return to university
to avoid the risk of being without accommodation when they return.
Student Letting Relies on the PRS
In York, as with other cities with a large student population, there are massive shortages in the student
accommodation sector. In York, these shortages have led to the local universities accommodating
some students in Hull, an hour’s travel away.2
Future demand remains so high that despite new large
blocks being built these are fully booked prior to completion.3
There is no prospect of the PBSA sector
being able to meet the need now or in the future. In York, as is generally the case nationally, PBSA
only accommodates 30-35% of students with the PRS housing over 50%. York can ill afford to lose any
landlords from the student accommodation sector and every one that leaves will lead to five or more
students either being unable to take up a university place due to a lack of accommodation or being
forced to live some distance away with consequent damage to their ability to study. Loss of PRS
property to the student sector cannot be made up with PBSA alternatives and all the evidence is that
new PBSA building lags far behind the level of need.
Loss of Fixed Terms
The loss of fixed term tenancies in the Bill will effectively destroy the current arrangement between
students and PRS landlords. Fixed term tenancies are prohibited by the Bill. As the Bill stands, landlords
will have no certainty that students are going to leave on any specific date unless those students have
given two months’ notice of their intention to do so. This is a stressful time for students when they
will be preparing for or taking part in exams. What seems like a simple administrative activity will
therefore not take place as intended as this will not be a priority for outgoing students heading
towards exams. Without that certainty landlords will be unable to accede to student’s desires to enter
into a tenancy. Indeed, they are unlikely to be in a position to do so until April in each year at the earliest, assuming notice is received from the outgoing students. Similarly, incoming students will be
busy with exams of their own and expecting them to identify and enter into a tenancy for a rental
property, often for the first time, alongside these pressures is unrealistic and unfair.
In practice, landlords are likely to seek alternatives to avoid the trap that the Bill creates. Many of
them will seek to offer licences by providing services to students alongside their occupancy, such as
in-room cleaning in a similar fashion to that done now in PBSA. Others will claim, incorrectly or falsely,
to enter into licences. In either case, students will be deprived of not just the protections provided by
the Bill, but even the current protections afforded to tenants such as notice periods in the event of
rent arrears and the protection of their security deposits. Landlords who do have tenancies under the
Bill will likely insist on full notice being provided and will not accept short or incorrect notice. Further
disadvantaging students who make small mistakes.
Unequal playing field
The Bill creates a purposefully uneven playing field. The PBSA sector who have signed up to the Unipol
Code of Practice will be permitted to exempt themselves from the Bill and grant fixed term tenancies.
PRS landlords, even those signed up to the Unipol code, will not. Even if a ground for possession is
created within the Bill the PBSA sector will still have the considerable practical benefit of having a fixed
term, which tenants tend to abide by, while the PRS will have indeterminate tenancies and continued
uncertainty. There is no justifiable reason for this approach. There is no evidence of lesser quality or
standards in the student PRS as compared to PBSA. Ultimately, it is likely to be students who will suffer
as they will be confused by the difference between accommodation in PBSA which will be for a fixed
term with no notice requirement and accommodation in the PRS which will require them to give two
months’ notice, or they will continue to be liable for the rent.
York RLA do not consider a specific ground for possession for the student PRS to be a workable
solution. The mechanics of the current proposal are excessively complex and will be unworkable for
landlords on the ground, especially taking into account local variations in practice between different
academic institutions and courses.
Without an offering to the student PRS comparable to that provided to the PBSA sector, landlords will
lose confidence and consider renting elsewhere or on terms that are less beneficial. It is likely to be
students that will lose the most from this.
The government must allow PRS landlords renting properties wholly or partially occupied by full-time students to offer fixed term tenancies. This could be accompanied by a requirement to sign-up
to a code of practice comparable to the Unipol code for PBSA.
York RLA would be keen to meet with you to discuss our concerns in more detail. Please contact us
on 01904 929 945 by phone or email email@example.com to arrange a meeting.