The House of Lords debates student housing

What was unusual about Day One was an afternoon spent listening to the House of Lords almost exclusively discussing students. What was miserable was listening to the collection of assertions about their needs and interests, as multiple fairly nakedly pro-landlord amendments were proposed.

There were certainly a number of disclosures of conflicts of interests – and they tended to be of the “I’m a landlord” type or version thereof.

You can take the view, of course, that landlord and student interests are not automatically opposed – and you can also take the view that measures that encourage landlord exit from the market won’t help students if there’s reduced supply and higher rents.

But it’s also true that the extent to which various measures in the Bill might or might be in the student interest requires a more nuanced judgement than was often on offer throughout the afternoon.

Fixed-term tenancies

The major showdowns were over one of the central proposals in the Bill – to remove fixed-term tenancies altogether, and instead convert all tenancies to open-ended “periodic” tenancies, along with restricting the ability of landlords to evict tenants to a tighter set of justifications while giving tenants the right to leave (on two months’ notice).

There are advantages to that for tenants – long(er) term security of tenure is one, and the balance of power is another. In fixed-term arrangements, landlords can effectively remove tenants at the end of a term without needing a reason, and can threaten eviction if a tenant attempts to assert their rights.

Students would benefit from that balance of power issue – and wouldn’t be trapped in contracts if they drop out, change their plans, find the house they signed up for unaffordable, fall out with potential housemates and so on.

But student landlords are worried – either that students will stay on beyond the normal academic year, making it harder to make the property available to students in the next one – or that students will leave early, leaving landlords potentially with an empty property for part of the year.

In the previous version of the Bill being looked after by former Secretary of State Michael Gove, and now via new Secretary of State Angela Rayner, two workarounds have been found:

• For university and private halls, a full exemption from pretty much everything in the Bill is being proposed on the basis that they’ll be regulated via Codes of Practice.
• And for off-street housing, a new “ground for possession” that will allow student landlords to evict students in the summer.

Bizarrely, a significant number of contributions pretending to be pro-tenant riffed off the idea that fixed-term tenancies offer certainty – most of which were seemingly oblivious to the rest of the Bill that provides certainty by restricting grounds for eviction and opening up grounds for leaving. I’ve not covered them, or the short shrift they tended to get from the government, here.

The debate

Baroness Scott of Bybrook kicked things off for the Conservatives, relaying concerns from Propertymark that scrapping fixed-term tenancies could harm vulnerable renters like students because many rely on guarantors who insist on the certainty of a fixed term.

Given another part of the Bill will remove the ability for a landlord to collect more than a month’s rent upfront (which is how some landlords have got around the guarantor issue), we can see why landlords might worry.

Plenty of students, of course, would be surprised to learn that guarantors were being framed as a way to access the rental market – NUS has been campaigning for their abolition. Either way, the government was not convinced that the issue would impact availability.

Cross-bencher Lord Carrington was concerned that a tenant might leave pretty quickly – playing havoc with mortgage payments and creating deposit and redecoration hassles – arguing instead for an initial six months before a tenant could leave.

One of the weird quirks of the Bill as it stands is that a student that has signed a tenancy can’t use their right to cancel until the tenancy actually starts. That wasn’t discussed – nor was the way in which six months would represent half an academic year for students – but in any event, the government’s view was that it would not support any amendment that seeks to lock tenants in for any period of time.

Baroness Scott returned to the floor with an entire speech on students – arguing against the emergence of a two-tier system where only those who cannot afford the most expensive purpose built accommodation would end up being granted the “stability” of fixed term tenancies:

…fixed term contracts provide students with clear a clear start and end dates, which not only make financial planning more straightforward, but also ease the burden of day to day administration tasks, tasks which can be particularly challenging for those experience independent living for the very first time, all while managing the demands of their academic studies.

This, like plenty of other contributions, seemed to miss both the summer eviction exemption and the ability for students to leave on two months’ notice. For the government, Baroness Taylor of Stevenage simply had to point at those provisions. Where Scott was spot on was on the “summer” thing:

…the current provisions acknowledge in part the need for student landlords to regain possession by the end of the academic year… however, this fails to take into account those students whose studies do not follow a traditional academic calendar.

The government was of the view that the “vast majority” of students do follow the standard academic year calendar – all without evidence, or noticing that those on long(er) academic years (for which there are specific student finance provisions) would very much need to stay on in June and July.

That matters because landlord forums are abuzz with the idea that to prevent students from leaving early, all they will need to do in the future is shift their contract start dates to, say June 1st. It’s the sort of issue that really ought to have been picked up by a proper look at this part of the market – but neither the opposition nor the government had anything to say on any of that.

The Conservatives were also concerned that under the new rules:

…under a joint and several liability tenancy, the early departure of one student results in the termination of the tenancy for all unless the remaining tenants can successfully renegotiate their terms, this leaves them exposed to uncertainty and potential financial strain through no fault of their own.

This is a real issue – one that the current Housing (Scotland) Bill has a partial solution for. But because Baroness Scott was attempting to retain fixed-term tenancies instead of actually addressing the issue, there was no English version of Scotland’s workaround on offer – and no meaningful response from the government.

Baroness Scott also had a run at including apprentices in the definition of full-time student to be used in the thing that will allow landlords to evict students over the summer – the government’s view on that was that apprentices are much more likely to need to stay on in a home in a community, so was in no mood to enable landlords to evict them.

David has entered the debate

Lord Willetts popped up next with a wry smile, declaring that:

…this is the moment when students and higher education enter the housing and rental market debate. I never totally sure whether the department responsible for housing welcomes this interruption from the higher education sector, but I hope the minister will accept it in the spirit in which it is meant.

Similarly, I’m not sure whether Willetts was appalled that the student market appears to have been so badly understood in both the previous and current’s iterations of the Bill – but his assertion that the “50 per cent target” was only met via the private rented sector won’t have won his arguments on recognising the link between opportunity and housing many extra friends on his own side.

Willetts, too, had a run at “students in halls are being treated better”, suggesting that:

…it’s going to be possible, almost at the beginning of the previous academic year, for the student to enter into a special academic year contract in this high cost purpose built accommodation. So to put it crudely, the government is looking after the elite. The government is looking after the students that plan a year ahead and can afford the high rents and go into the by and large, very high quality purpose built accommodation with, indeed, often business investors behind them.

I can’t tell whether his tongue was in his cheek when he failed to spot that a landlord intending to evict students in the summer will be free to advertise their property in the same way as halls operators – what I can say is that the idea that students trapped in PBSA contracts for a full year may well view themselves in a worse position than students in houses that can walk away if they drop out or fall long-term ill was not mentioned.

Baroness Baroness Wolf of Dulwich appeared next – referencing her membership of the Augar review, and arguing that all landlords should be able to turf out students over the summer, rather than just those operating HMOs with students in them, and so ignoring those who need to stay longer (see above) and those on academic years with other entry points.

What Wolf didn’t do was take the opportunity to castigate previous or current government for failing to take up the recommendations in the Augar review – a proper look at PBSA profits, better information on availability and supply for prospective students, and so on. Wolf’s argument was the Bill could decrease supply, the government’s was that its wider actions would increase it.

Conservative Lord Fuller argued that the Bill would reduce the choice of landlord because it lays down in statute the sole type of landlord counterparty that students can contract with if they wish to have the “certainty” of an annual let (ie being trapped for a year).

He was also concerned that international students may be unable to get a room at all – but again, rather than interrogate the anti-discrimination clauses in the Bill, he was aiming at removing its central logic – and so his closing statement got the response you’d expect:

…it’s just another example of Labour preferring big business, the operators of these large student schemes, over the nobility of the small family business. But there is one silver lining though, teaching students at a former formative moment in their lives, the adverse effects of the dead hand of the nanny state telling them what they can and can’t do is more likely to drive them promote the cause of capitalism than it is socialism.

Conservative Lord Evans of Rainow wanted to know why the government had prevented a landlord intending on using the summer eviction provision from signing a tenancy more than six months before it was due to start. There’s a decent problem to get at here – a danger that on a single day in most cities there will be quite the scramble for student housing. But given Evans hadn’t thought about the problem of students being pressured into signing contracts preposterously early, the government’s defence-in-principle missed the practical problem.

Some of those issues may return at Report Stage – but it looks relatively certain from here that the key issues for students in the Bill aren’t going to be tackled, either because they’ve not been noticed, or because they’ve been appropriated as arguments against the abolition of fixed-term tenancies.

Whether the main set of issues will actually reduce HMO supply is unclear – similar arguments have been made in Scotland, and similar arguments have been debunked too.

But on the detail, despite a version of this Bill having been around since May 2023, it’s hard to forgive a political system where students have fallen between the policy stools of DfE and MHCLG, have been largely ignored by MPs, and have only attracted the attention of Lords when referencing concerns from landlords.

Proper student housing strategies – like those seen across Europe – remain a pipe dream.