Introduction
The Renters (Reform) Bill, which was published by the Government on May 17, 2023, aims to bring significant changes to the private rented sector (PRS). While the bill addresses various aspects of renting, this article will focus on its potential impact on students and landlords. Currently, student renting operates differently from the rest of the PRS, with students signing fixed-term tenancy agreements (FTTAs) for up to 12 months. However, the Renters’ Reform Bill proposes to ban FTTAs, bringing student renting in line with other forms of private renting. This article explores the advantages and disadvantages of FTTAs for students, examines the proposed changes in the bill, and analyses their potential impact on students and landlords.
The Current System of Student Renting
In the current system, most students living in private rented accommodation sign FTTAs with their housemates for a duration of 12 months, often from July to July. While FTTAs provide students with the security of knowing where they will live for the next academic year, they also come with limitations. Students are unable to end the tenancy until the end of the fixed term, even in cases of friendship breakdown, withdrawal from studies, or finding alternative accommodation. Additionally, students are required to move out at the end of their 12-month tenancy agreement, unless they can secure another 12-month tenancy.
Proposed Summary Changes in the Renters’ Reform Bill
The Renters’ Reform Bill introduces several changes to the current system, including:
Application of the Decent Homes Standard to the private rented sector, aiming to improve the quality of rental properties.
Strengthening landlords’ power to evict tenants for anti-social behaviour or failure to pay rent.
Establishment of a new ombudsman to provide quicker and cheaper dispute resolutions.
Creation of a digital portal to enhance landlords’ understanding of their duties and provide tenants with better property information.
Making it illegal for landlords to have a blanket ban on renting to tenants with children, pets, or tenants on benefits.
Ending ‘Section 21’ no-fault evictions.
Banning fixed-term tenancy agreements (FTTAs) to align student letting with the rest of the private rented sector.
Allowing rent increases only once a year.
Impact on Students
The proposed ban on FTTAs will have a significant impact on students. While it provides greater flexibility, allowing students to remain in a property indefinitely until they give their two-month notice, it also raises concerns about housing stability. The change means that students will finish one year of study without knowing where they will live the next year. They may also feel pressured to secure accommodation quickly, potentially leading to a reduction in housing standards. Furthermore, joint periodic tenancies may pose challenges when some students want to leave while others need to remain in the property, potentially leaving the latter without a place to live. The removal of FTTAs may also lead to a decrease in available student housing and an increase in rental prices.
Impact on Landlords
Landlords, especially those in the student rental market, are concerned about the impact of banning FTTAs. Joint periodic tenancies and potential renting voids over the summer months may lead landlords to shift towards professional lets or the unregulated Airbnb market. This change can reduce the supply of student rental properties, increase competition, and potentially result in higher rental rates. Additionally, the licensing restrictions and liability issues associated with individual room lets may discourage landlords from adopting such a model.
PBSA and the Renters Reform Bill
While the bill proposes to ban fixed-term tenancy agreements for students, it’s important to mention that PBSA (Purpose Built Student Accommodation) providers registered with the government can still utilize such agreements. However, it’s worth noting that PBSA generally tends to be pricier compared to off-campus student housing options.
Lessons from Scotland
Scotland implemented its own version of the Renters’ Reform Bill in 2017, which included similar changes to the private rented sector. One notable change was the ban on fixed-term tenancy agreements for all renters, including students. The impact of this change in Scotland provides some insights into how the proposed ban in England could affect students and landlords.
In Scotland, the removal of fixed-term tenancies for students resulted in increased flexibility and the ability to stay in a property for as long as needed. This change allowed students to align their housing arrangements with their academic schedules and reduced the stress of finding new accommodation each year. However, there were also some challenges that emerged.
With the removal of fixed-term tenancies, students faced increased uncertainty about their housing situation, as they had to give notice and find new accommodation if they decided to leave. This created a potential mismatch between the academic year and rental periods, as many students finish their studies in the summer months. As a result, some students had to find temporary accommodation or negotiate short-term rental agreements to bridge the gap between academic years.
Landlords in Scotland also had to adapt to the changes brought by the ban on fixed-term tenancies. They had to manage more frequent turnover of tenants, which increased administrative tasks such as advertising and screening new tenants. Some landlords faced difficulties in finding new tenants during the off-peak periods when students were not actively seeking accommodation.
Additionally, the ban on fixed-term tenancies in Scotland led to a shift in the rental market. Landlords who previously specialized in student rentals had to reconsider their business models and explore other rental sectors. This change, coupled with the introduction of additional regulations and licensing requirements, contributed to a decline in available student housing options in some areas and potentially increased rental prices.
Potential Solutions and Mitigating Measures
To address the concerns raised by the ban on fixed-term tenancies for students, there are several potential solutions and mitigating measures that could be considered:
Improved communication and coordination: Academic institutions could work closely with local authorities and housing providers to facilitate smoother transitions between academic years. This could involve providing clear guidance and support to students regarding housing options, timelines, and available resources.
Enhanced support for student renters: Student unions, housing advice services, and tenant support organizations could offer guidance and assistance to students navigating the rental market. This could include information on rights and responsibilities, guidance on searching for accommodation, and support in resolving disputes with landlords.
Encouraging longer notice periods: Landlords could be encouraged to offer longer notice periods to students to provide them with more time to find alternative accommodation if needed. This would help alleviate the potential housing instability caused by the removal of fixed-term tenancies.
Incentives for landlords: The government could consider providing incentives or tax breaks for landlords who offer longer-term tenancies to students. This could encourage landlords to provide more stable housing options for students, reducing the potential negative impacts of the ban on fixed-term tenancies.
Monitoring and evaluation: It will be crucial to closely monitor the impact of the ban on fixed-term tenancies for students and landlords. Ongoing evaluation of the changes will help identify any unintended consequences and inform future policy adjustments or additional support measures if necessary.
In Closing
The Renters’ Reform Bill proposes to ban fixed-term tenancy agreements for students, aligning their renting experience with other private renters. While this change offers increased flexibility, it also introduces potential challenges, such as housing instability and reduced housing options. Lessons from Scotland’s implementation of a similar ban on fixed-term tenancies highlight the need for careful consideration of the impacts on students and landlords. Implementing effective support measures and ensuring ongoing monitoring and evaluation will be crucial to mitigating potential negative consequences and creating a balanced rental market that benefits both students and landlords.
