All Student Lets Should Be Exempt from Plans to Ditch Fixed Term Tenancies

All Student Lets Should Be Exempt from Plans to Ditch Fixed Term Tenancies

Plans to abolish fixed-term tenancies in England will “decimate” the student housing market, the National Residential Landlords Association (NRLA) said.

But the National Union of Students said if students were exempt from the reforms, they would become an “underclass”.

Meanwhile, the government said it was “engaging” with students and landlords.

Background

As anyone in the business of letting to students will know, landlords renting to students typically offer a 12-month fixed-term contract to match the academic year and ensure properties are not left empty outside term-time. Often, these tenancies are agreed to and set up in the January or February before the academic year starts the following October, (though timings vary by university and college).

However, the key point is that both students and landlords in this market want certainty. Students want to know they have a place to go to in October for the whole year and landlords want to know they have secured a group of students, so they don’t face a void.

Under the Renters (Reform) Bill bought into parliament last week, fixed term tenancies will be abolished and replaced with rolling tenancies, which means tenants pay rent weekly or monthly with no fixed end date.

The changes mean tenants will only need to provide two months’ notice to leave a property.

The bill, which also scraps the incorrectly labelled “no-fault evictions”, (there is usually a fault), with landlords only able to evict tenants in certain circumstances, including when they wish to sell the property or when they or a close family member want to move in.

The NRLA said under current proposals, landlords would be reliant on sitting tenants giving notice to leave a property in good time to enable new students to move in.

Of course, they are right. What should be available is a provision allowing student landlords to end a tenancy in line with the academic year.

Under the proposed bill as it stands now, if one tenant decided to stay on in the property, this could block another group from moving in. And if a tenant chose to move out early a room could be empty for several months until the start of the next academic year, leading to a loss of income.

This is because outside the main times for letting in this specialist market, there are not many other students just milling about wanting to rent a room. And other potential tenants – workers say – are generally not keen on joining an existing let with a bunch of students who all know each other and tend to have very different lifestyles to working non-students, who have to get up before 11am.  

Another Wave of Mom and Pop Landlords Exiting?

Many landlords are warning that if the issues with the bill were not resolved they would consider selling their properties, this would lead to increased rents for students, as the supply of available properties and competition from remaining landlords would be reduced.

But a lot of landlords won’t be able to take the risk. They won’t be able to have voids or rooms which are not let halfway through the year.

The bill has not yet been debated by MPs and peers, and changes could be introduced before it becomes law.

We hope so, but are not holding our breath for the reasons I shall explain in a moment.

In Scotland, where fixed-term tenancies were scrapped in 2017, new tenancy rules have contributed to landlords leaving the student rental market and renting to longer-term tenants instead. Students in Scotland have been sleeping in doorways and emergency put-up beds in academic facilities, such is the dearth of accommodation, especially in Edinburgh.

But the myopic, National Union of Students has said exempting students from rental reforms would create an “underclass of tenants”, who would not benefit from the same safeguards as other renters. Doh!

The Union added that under the current system of fixed-term tenancies students were forced to pay for rooms they were not using over the summer months, or if they left their courses early.

Yes, and so what?

This is all “in the price” of the set rent.

Generation Rent, who can usually be relied on to “out-dumb” Shelter, (which is not an easy task), said treating students differently from other renters could encourage “unscrupulous landlords to target that sector and take advantage of looser rules”.

They told the BBC, “Part of the reason the government is scrapping fixed terms for the private sector is to give tenants a little bit more flexibility if the home that they move into turns out not to be suitable. So, if you’re signed into a tenancy for a property that’s falling apart, if you’re unable to get your landlord to make the repairs that are needed, then in a lot of cases moving out would be an option.”

Well, my argument here would be what could go so wrong over a short period like a 12-month tenancy? Also, tenants have a lot of law on their side to compel landlords to get things fixed.

And why would landlords want to get a bad reputation for not sorting things anyway? Word travels fast and student bodies rightly keep a record of the bad landlords, who would find themselves blacklisted by poor reviews the following year.

The truth is that there are often two sides to every story. For example, a landlord might not be fixing things up like mice infestations or damp problems because it is the students’ lifestyles that are encouraging the mice and creating the damp problem. Any action the landlord could take in such cases would be pointless and a waste of money.

A spokesperson for the ludicrously named Department for Levelling Up, Housing and Communities, (well, they could hardly call it the Department for Build Back Better and Levelling Down) said: “The vast majority of students move out at the end of the academic year and will not be impacted by these reforms. “However, we continue to engage with students and landlords on these measures to ensure they are working for both parties.”

But the question is why this bill was bought to the house of commons with this issue still unresolved. After all, the NRLA has highlighted for many years, that in any plan to ditch fixed term tenancies, the student market must be exempted.

Plus, the government already has the experience of Scotland to show them that the student market needs to be treated differently.

Purpose Built Student Accommodation Exempt

But maybe the answer lies in the fact that purpose-built student accommodation, which is built specifically for students, will apparently be exempt from these changes but other student housing will not.

No explanation is given for this exemption.

The purpose-built student accommodation is usually built by big businesses, often global ones and often financed by pension funds and banks.

For many financial institutions, this is the quid pro quo, the deal with the government.

Stated simply, they will keep buying government bonds to finance the ever-ballooning debt, but only if, in return, they get a free hand at the juicy, inflation proof private rented sector. And if the pesky, more efficient and lower rent private landlords are driven out of the way, that is all to the good as that will only enhance the future profits for the big boys.

And so that is your answer – the changes and the exemptions from these rules for the big players, for the builders of big, boring student blocks is all part of the government’s drive to attack small businesses generally and hand over control to big businesses, ideally global investors. In the private rented sector, this follows a sustained tax assault over the last eight to ten years specifically targeted at the Mom and Pop landlords.

We see this in many other parts of the economy, both during and since the plandemic where big tech, big social media and big businesses generally have hugely grown their market share, their wealth and their power and small businesses have been driven to the wall. We saw big supermarkets allowed to open whilst small shops selling the same things faced visits from the police and huge fines if they dared defy the “lockdowns” and stay open.

Wiping out small Mom and Pop landlords in favour of institutional investment in the private rented sector is all a part of the same agenda, hence the exemptions for the purpose-built student accommodation sector and their bland high-rise blocks.

I have been warning about this for years but just don’t expect the NRLA to talk about this as the real reason behind these changes.

And don’t expect to see the Mom and Pop landlords in student lets granted an exemption and being allowed to continue to run with fixed term tenancies.

But despite all this, rents are rising at a good lick still – and many landlords who are staying the course are enjoying good times.

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One comment

  • As ever when govt legislates it generally creates unintended problems that any fool can see. There’s collusion between big business and govt in most sectors these days and providing homes to rent is no exception.If I remember rightly, that’s fascism isn’t it?

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