Call to introduce student tenancy break clauses

Steve Lumley·13 August 2020·4 min read
Call to introduce student tenancy break clauses

A call has been made for student tenancy agreements to include a break clause should another wave of Covid-19 take place.

A survey of students and parents was carried out by Money Magpie and it found that 89% of students would like a break clause to be included in their rental contract.

The idea was backed by 91% of parents.

The break clause would see students being able to return home should their university be forced to close in a second Covid-19 lockdown.

The clause would also mean they would not be liable for paying any rent that remained under their contract.

Students being forced to leave their universities

The moves follows issues that arose with students being forced to leave their universities as part of lockdown measures, but still being liable for paying their summer term rent.

The founder of Money Magpie, Jasmine Birtles, said: "Students who are at university in the autumn must insist on a break clause with the landlord of their accommodation, whether they are private or a large company."

A spokesman for Arla Propertymark, said: "There's no need for altering student accommodation contracts unless the government passes a specific law for student grants and loans."

He added that as students can access financial aid, they can pay rent and any alterations to the system will see student landlords looking at a big drop in income which will have a knock-on effect on the whole student accommodation market.

International investors still wanting UK student accommodation

Meanwhile, the largest market for student accommodation investment in Europe is the UK, research reveals.

The findings from real estate firm JLL highlights that international investors are still looking to invest huge sums into the UK student housing sector with their main focus on London, followed by Glasgow and then by accommodation in Edinburgh.

In a report, the firm's research and strategy director, Philip Wedge-Bernai, said: "A growing student population has been driving investment demand for accommodation."

He added that student numbers are expected to grow by 27% over the next decade, or by around 40,000 new students every year.

The report also highlights that the UK is home to three of the top cities in Europe in terms of the number of beds under construction or in the planning process.

Mr Wedge-Bernai adds: "Over the past five years, the supply of units has picked up and the UK is still not been building enough for meeting the projected demand."

He says that the mismatch between demand and supply, along with the close bonds between student accommodation providers and universities, is helping to sustain investor interest.