A recent survey by the National Residential Landlords Association (NRLA) suggests the biggest fear for student landlords is the move to a system of periodic tenancies. These proposed UK rental reforms would abolish the fixed-term contracts that are standard in the student housing sector. The changes proposed by the Renters’ Rights Bill has created significant uncertainty for student landlords who are worried it has threatened the practicality of their business model.
Research by the NRLA from the third quarter of 2024 found that 78% of student landlords were extremely concerned about the removal of fixed-term tenancies, compared to just 31% of non-student landlords.
Why periodic tenancies cause issues for student landlords
Student lets typically revolve around the academic calendar, with contracts either running for a fixed period of 12 months or just for the length of the academic year. This ensures that landlords have a predictable turnover and allows for new tenants to be secured well in advance of the next academic year.
Period tenancies are thought to disrupt that annual cycle as a student can give just two months’ notice to leave at any point. This provides more freedom in term of abandoning contracts for students but could leave landlords with voids in their tenancy.
For example, many students finish their studies between April-June and after exams they go home for the summer, so instead of wasting money on rent this new RRB provision will allow them to save on a few months’ of rent. However, making it hard for landlords to find replacement tenants over the summer months.
This results in further issues as it hinders any chance of planning for the future. Landlords cannot guarantee properties for incoming students if they don’t know for certain when existing tenants will leave. Overall, this inevitably makes it harder to plan for the next cycle, inducing a knock-on or domino effect.
How have student landlords reacted to the changing situation?
Landlords within the student housing sector have noted that the RRB allows an unfair competitive advantage for PBSA providers because purpose-built student accommodation is exempt from the new rules and will be able to carry on essentially as usual, offering fixed-term contracts.
The NRLA has warned that the uneven landscape of these rules will see more landlords being forced out of the market. Again, the domino effect would be activated as landlords leaving the sector would shrink the supply of private student accommodation.
Reducing this supply of homes for students would only cause an inflation of rent prices due to the scarcity of remaining properties. Furthermore, worsening the housing crisis where students may be forced to move elsewhere to more expensive accommodation.
The NRLA reports, “A similar move in Scotland saw a higher-than-average exit of landlords from the student market and reports of a housing crisis.”
Where does the NRLA stand on this issue?
The NRLA says they are lobbying the UK government to amend the RRB in hopes of protecting the student housing market. Their campaign proposes solutions like:
“Allowing student landlords to use fixed-term tenancies that align with the academic year.”
And “Creating a specific ground for possession that allows landlords to regain a property with two months' notice in month 10 of a 12-month contract, so it can be re-let for the new academic year.”
