PBSA will be made exempt from the Renters’ Rights Bill
In recent months, the Renters’ Rights Bill has brought a lot of uncertainty to the housing market, with landlords worrying over how they would be affected if the proposed changes come into place. Lots of amendments to the initial proposal have been made and a new decision was released on April 1st.
Ryan Heaven, Consultant Solicitor at Heaven Lettings Law Consultancy, says “This has been coming for some time, but the exact wording of how the Purpose-Built Student Accommodation sector (“PBSA”) will be made exempt from the Renters’ Rights Bill (“RRB”) has not been clarified until now.”
Heaven explains that Clause 34 from the House of Lords Bill 60 Running List from April 1 st contains this much awaited exemption of PBSA in the RRB list of amendments.
More importantly, the PBSA immunity has been put forward by Baroness Taylor of Stevenage (who is the Labour minister for Housing in the House of Lords.)
Ryan says, “This means it is very likely to garner government support and so make it into the final version of the RRB.”
That being said, Ryan states that the usual caveats apply; these are proposed amendments, so it doesn’t mean they are necessarily going to make it to the final version. Even if they do make it, the amendment may not be in the form it is now - other changes could be made.
Clause 34
If a PBSA provider signs up to an “approved” code of conduct then the idea is that as a result of Clause 34, any tenancies created cannot be ‘Assured Tenancies’ and so will fall outside of the RRB regulations.
Currently the approved code is produced by ANUK and Unipol, and details on that code can be found here .
“The code itself is quite benign, and you would expect most reputable PBSA providers to already be compliant with it,” informs Ryan, before expanding that, “The clause operates (as expected) by amending Paragraph 8 of Schedule 1 to the Housing Act 1988 which is currently reserved for higher education establishments.”
This means that PBSA would still be subject to the definition of “tenancy” through S28 of the Tenant Fees Act . However, Ryan states that PBSA will not be subject to the new part of the TFA that introduces a ban on advanced rent as this section only applies to Assured Tenancies.
This alone is a good reason for a PBSA provider, who is not currently a member of the code, to sign up as it allows them to take on international students as tenants who may otherwise be seen as “risky” due to not being able to provide a UK guarantor.
What this exemption from the RRB would mean
It’s a big deal because the new bill precludes fixed term tenancies, so this proposed exemption will enable PBSA to have those fixed tenancies. Therefore, PBSA providers may benefit most from this arrangement and could gain an increased income from the fixed tenancies.
Contact Ryan
Ryan Heaven
Consultant Solicitor at Heaven Lettings Law Consultancy
Email: ryan@heavenllc.co.uk
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