The government has unveiled new measures aimed at ending the annual student
housing ‘arms race’ for accommodation.
That’s when students often feel pressured into prematurely signing rental
contracts.
The revelation came when Matthew Pennycook, the housing minister, was
speaking in the Commons debate for the
Renters’ Rights Bill.
He said that many students are forced to make important housing decisions
before they have formed stable friendship groups.
The amendment to the Bill aims to prevent a landlord from evicting students
using Ground 4A if the contract was signed more than six months before they
moved in.
‘General student rental market’
Mr Pennycook said: “Those honourable members with large student populations
will know, the dynamics of the general student rental market in many parts
of the country see students compelled to make important decisions about
accommodation long before they have formed stable friendship groups or have
had time to properly judge a property’s condition or location, and to
consequently pay substantial deposits at a point in time when they are
already coping with significant additional costs.”
He went on to say that the current situation that sees students being
pressured to sign up is not beneficial for them and may not even benefit
the landlords involved.
Allows landlords to ‘recover possession’
The Bill allows landlords to ‘recover possession’ of a house in multiple
occupation (HMO) with student tenants from June to September.
Mr Pennycook added: “I want to be clear that the amendment would not lead
to an outright ban on contracts being agreed more than six months in
advance.”
He said that if the rule is passed, it would serve as a ‘strong
disincentive’ to prevent landlords ‘pressuring’ students to sign up early.
Amendments to the Bill affecting student landlords
The Commons vote also rubber stamped the proposal for ending assured
shorthold tenancies for the student accommodation sector and switch to
periodic tenancies.
Other amendments to the Renters’ Rights Bill affecting student landlords
which have been voted on by MPs before it moves to the Lords include:
- Eviction grounds for student tenancies
Along with the eviction Ground 4A for student HMOs being used when the
tenancy is signed less than six months before its start date, landlords may
struggle to regain possession of their properties ahead of each academic
year, affecting future tenancies.
Propertymark highlights
that this Ground does not apply to one- and two-bedroom (non-HMO)
properties rented to students, raising concerns about the security needed
to continue offering these properties, potentially reducing available
accommodation in university towns.
- Limiting rent in advance
The government’s restriction on tenants paying rent upfront could limit
housing options for financially vulnerable individuals.
This includes overseas students, those on fixed and lower incomes and the
self-employed.
Students from abroad, Propertymark warns, may face challenges passing
referencing and affordability checks.
Paying a larger proportion of rent at the start of a tenancy provides an
alternative way to demonstrate financial stability, giving landlords
confidence, it says.
Mr Pennycook stated that landlords can still request one month’s rent in
advance and a security deposit of up to five- or six-weeks’ rent.
He emphasised that referencing and affordability checks, along with the
ability to request guarantors, should reassure landlords.
- Guarantor liability after tenant’s death
Another amendment to make it into the Bill is one to prevent individual
guarantors from being liable for rent after the tenant they guaranteed
passes away.
Housing Secretary Angela Rayner noted that this change protects bereaved
guarantors, often family members, from financial hardship during a time of
grief.
Amendment will alarm many student landlords
The managing director of Accommodation for Students, Simon Thompson, said:
“The latest amendment to the Renters’ Rights Bill will alarm many student
landlords.
“The competition for student accommodation is stiff in most areas so
signing up quickly makes sense. It also makes the search for somewhere to
live easier for many.
“The amendment to restrict possession to those tenancies signed less than
six months before the students moved in shows a lack of understanding of
the student accommodation sector.”
He added: “Not only will student landlords have to deal with the move to
periodic tenancies and a restriction on upfront payments, but this Bill
could be law by the summer.
“That means student landlords will have to get organised quickly to meet
the new legislative demands being made on them.”
