Abolishing fixed-term tenancies will devastate the student market and lead to a major contraction of student homes to rent, warns a leading accommodation provider.

The government’s Fairer Renting White Paper includes plans to move all new and existing tenancies to periodic agreements where tenants will be able to give two months’ notice to quit, while landlords will have to rely on the current mandatory grounds.

Leicester-based Sulets – a not-for-profit, charitable trust – says the student market works on the basis of fixed-term tenancies where there is a defined start and stop date directly linked to university terms.

If tenants gave two months’ notice, the likelihood of most landlords being able to rent to students for anything even approaching a calendar year would be fairly low, explains CEO Irving Hill (pictured).

He says: “If the student tenant should give notice, the chance of renting to another student becomes increasingly difficult as the academic term wears on and particularly so over the summer.

“Importantly, there will be no guarantee that the property will be available to rent at the start of the normal termly cycle in September which will make any type of planning extremely difficult for student landlords and agents.”

Exempted

Purpose-Built Student Accommodation (PBSA) has been specifically exempted from these provisions in the White Paper, adds Hill, leading to a disparity. “This will restrict choice and will mean increased costs for students due to the significant price differential between PBSA and the student PRS.”

Some landlord leaders have already warned that the entire student let model could fall apart if a loophole isn’t put into the legislation to maintain fixed-term contracts. 

11 COMMENTS

  1. Those in the government don’t have friends with just a half dozen terraced student let’s, they will all be into large PBSA’s. Hence the exemption. Let’s face it they can’t wait to get us out of the market. Look at the number of modern student ghettos that are being built and planning permission applied for. I don’t suppose they know anyone with a turnover of less than 7 figures. Let’s hope common sense prevails before the next election as the alternative could be worse.

  2. I think it’s more likely to be cock-up than conspiracy. People in charge who haven’t properly thought through the consequences or just aren’t intelligent enough to do so.

  3. This is all part of Govt strategy to force LL to sell up.

    No cock up at all.

    Just malign Govt policy playing out.

    Individual Council Tax banding to arrive at ex student properties anytime soon!!!

    Student LL more likely to just sell up.

    Which is what Govt wants.

    • You may be right Paul (about it being conspiracy rather than cock up). If you are, the arrangement currently outlined will not be amended following consultations. If you aren’t, there will be changes made to address the unintended consequences and correct the cock up. Interesting to note that the chief exec of the NRLA has student rentals, so I’m sure he will ensure the NRLA responds meaningfully and authoritatively to the consultation.

      • Can’t see the new legislation giving special consideration for one type of tenant demographic.

        Scotland has introduced similar bonkers legislation which has resulted in a 30% rent increase and student LL leaving the market.

        Govts refuses to acknowledge that their perverted ideology damages the prospects for tenants.

        Nope I’m afraid student LL will have to accept that their business model will be damaged beyond repair and have to consider selling up or adopting some other form of letting tenure.

  4. I just hope that Michael Gove is just electioneering for the job of Prime Minister. But in the process he will cause devastation to the Student Market. We need simple Fixed Term Tenancies whether they are for 11 months of 50 weeks. We all know that when the students move out there are always repairs, redecoration and substantial cleaning costs.

    We undercut the Purpose Built Student Accommodation by about 30%. Ok we don’t provide cleaners and clean bed linen every week and a security guard on the door. Instead the students are expected to learn how to clean and do their own laundry, which is a life skill. they are fresh out of their parents home and always struggle in the real world.

    But is is not just Students. Contractors, short term workers and the mobile workforce all need temporary accommodation. Nobody on a 6 month contract wants a hotel. Landlords need a minimum of 6 months Fixed Term otherwise the setup costs, agents fees, inventory costs and cleaning, will spiral out of control.

    We actually need the flexibility to create contracts for the many and different types of tenants. Not just the Social Housing that Generation Rent and others focus on.

    The only winners on this will be Hotels and PBSA. Everyone else looses due to higher rents.

  5. Yes, as proposed, the white paper is going to decimate the student market. Many HMO Landlords will either sell up or move over to letting to so called professional. The biggest impact is going be on the students themselves. They’ll have to pay substantially more to live in the exert Uni blocks or go to a Uni close to home

  6. They didn’t need to waste parliamentary time on this, the legislation already existed since 1988 but they won’t stop meddling to destroy the Private Rented Sector. Why are they exempting new Student Blocks of Flats, it stinks looking after their cronies and destroy us. They don’t know the meaning of the word fair or tell the truth.

  7. Without a minimum 6 mos, without a Sec 21 existing, and rent arrears to be 2mos before an expensive eviction process can start, presents LL with the obvious!Then consider the deposit dilemma! What stops tenants from stopping paying their rent last two months, and leaving the property a wreck?

    Also my furnished HMO’s deposit = 2weeks rent, but only 2 weeks notice is required. HMO tenants mostly cannot afford any bigger deposit, and often need to leave on short notice.
    How’s it going to work now, Michael Gove?

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