Landlords have said they will abandon the student lets market in droves as Labour’s Renters Rights Act comes into force on Friday.
Nearly half of all landlords say they are much less likely to offer student accommodation following the new rules, research from tenant referencing company Goodlord revealed.
Student tenancies face a complete overhaul when the new Act comes into effect on 1 May.
Under the rules, all properties will now be let on ‘periodic’ or rolling tenancies, which means landlords won’t be allowed to tie tenants in for a fixed term, such as one year.
Renters can end a tenancy whenever they like, as long as they give the landlord two months’ notice.
Like other renters, students have previously had to sign contracts for a year or more – even though academic terms typically start in September or October and run until June.
Many vacate their accommodation early and spend the summer living with their parents, but must keep paying for it regardless.
Now, students could decide to exit a tenancy at the start of the summer, leaving landlords with an empty property for three months until the next year’s students arrive.
Wide berth: Nearly half of all landlords say they are much less likely to offer student accommodation following the new rules, research from Goodlord revealed
And if a student decided to leave in the middle of the academic year, landlords would be incredibly unlikely to find new student tenants.
To add to this, some landlords may prefer student housing because they can let properties on the basis of one-year contracts.
But with the new rules, a student can stay in the property for as long as they wish, unless the landlord is looking to sell the property or move in themselves.
This could upend the predictable, calendar-based assumptions landlords make when entering the student housing market.
It is good news for students as it could save them money on rent for an unused property.
However, if lots of landlords decide to stop renting to students because of this, it could make it harder to find a place to rent and drive up competition and therefore costs.
Only one per cent of landlords thought the new law would make them more likely to offer student lets, according to Goodlord’s survey.
The Act includes provisions to allow landlords to take possession of student lets in time for the next academic year.
But this only applies to houses with with three or more tenants – known as houses of multiple occupation or HMOs.
Purpose-built student accommodation is also exempt from the switch to assured tenancies and can continue to offer fixed term contracts.
Emily Popple, director of landlord experience at Goodlord, said: ‘Lots of renters will benefit [from the Renters’ Rights Act] , but it isn’t logical for key groups such as students. Student renters need a rental market that they can rely on – one that offers them a decent choice of properties in the right locations, available at the right times.
‘Disrupting the natural cadence of student property turnover could therefore create very real challenges.
‘It’s no surprise that this is putting landlords off from investing in the sector, despite certain provisions in the Act helping groups of landlords retain control.’
The Ministry of Housing, Communities and Local Government has been contacted for comment.
