MPs call for student tenancies to be exempt from PRS reforms

Steve Lumley·13 February 2023·5 min read
MPs call for student tenancies to be exempt from PRS reforms

Student landlords will be pleased to hear that MPs say that student tenancies should be exempt from government proposals to become periodic or open-ended tenancies.

The revelation comes in the Levelling Up, Housing and Communities Select Committee's report on the planned changes to the private rented sector (PRS).

In it, MPs make clear that plans to replace fixed-term tenancies with periodic tenancies are welcome to bring security for tenants - except for the student accommodation market.

The White Paper published by the government states that only purpose-built student accommodation (PBSA) will be exempt from the introduction of periodic tenancies – while private student landlords will have to accept open-ended tenancies.

‘Could make letting to students considerably less attractive’

The MPs say: “Currently, the proposal is to include this part of the PRS in the tenancy reforms, but we conclude that abolishing fixed-term contracts here could make letting to students considerably less attractive to private landlords, as the student market mirrors the academic year and benefits greatly from 12-month fixed tenancies.

"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."

Mandatory grounds for possession

The committee also says that all forms of anti-social behaviour from tenants should be mandatory grounds for possession and that guidance for courts should be developed to ensure these cases are dealt with swiftly.

The MPs also say that if section 21 is repealed, it means landlords will need to rely on section 8 of the Housing Act 1988, but this will need to be amended with new grounds for possession for landlords or their family who want to move into the property or if they want to sell it.

The report also recommends making it easier to gain possession where a tenant has at least two months of rent arrears – and racked these up at least three times in the last three years - regardless of their status on the day of the hearing.

‘Fair and workable for both tenants and landlords’

Chris Norris, the National Residential Landlords Association's policy director, said: "The NRLA has never been against reform of the sector, but it has to be fair and workable for both tenants and landlords.

"That is why the Committee is right to call for court reform to underpin the ending of Section 21, changes in plans for student tenancies and ensuring cases of anti-social behaviour are prioritised by the courts."

Simon Thompson, the managing director of Accommodation for Students welcomed the report and said: “It is good news that MPs on the committee understand the impact that periodic tenancies will have on the student accommodation sector, but we have to see what the reforms will bring.

“As landlords, we need to continue working together to highlight that the introduction of open-ended tenancies will be a disaster for student landlords and for students who are already struggling to find somewhere to live while they complete their studies.”

Purpose-built student accommodation is ‘unfit for purpose’

NUS Scotland is calling for the reintroduction of a rent freeze in the country’s student PRS and says that purpose-built student accommodation (PBSA) is ‘ unfit for purpose’ . The union also highlights in a report, that between 2018 and 2021, student rents rose by 34%. And some students have been forced to live in unfinished, unsafe buildings while others have had to sleep on friend’s sofas or live in hostels. The union highlights that the student population in Scotland is growing but there’s been a drop in private rented accommodation supply which means more students are relying more on PBSA. However, PBSA tends to be more expensive, and the rent rises are ‘consistently outstripping inflation’. Ellie Gomersall, the NUS Scotland president, said: “This report reveals the appalling state of the purpose-built student accommodation sector. Whilst 12% of students have experienced homelessness since starting their studies, unchecked rent increases have allowed landlords to make untold profits. In the same period that rents have increased by 34%, student support has only increased by 4.5%.” She added that the rent freeze must be reinstated by the Scottish government - just weeks after the freeze was removed but it will be replaced with a 3% rent cap for PRS tenancies in Scotland from April.