Rental reform is coming – what should SUs do next?

Rory Hughes is a housing policy and campaigns consultant

The white paper prefacing the long-overdue Renters’ Reform Bill has been published and, whilst not perfect, it is nothing short of a once-in-a-generation overhaul of the Private Rented Sector (PRS) for the many.

I know this because in my time as NUS’ housing policy lead, I led the organisation’s lobbying efforts with government and the student housing sector – including authoring NUS’ consultation response in 2019 to the fundamentals of the now-announced reform.

I also signed NUS up to be part of the Renters Reform Coalition and sat on the Department for Levelling Up, Housing and Communities policy working group on tenancy deposit reform as part of the Bill.

Since then, I have since been shaping the government’s Bill proposals on the new Decent Homes Standard and improving energy efficiency in rented homes as well as continuing to work with organisations like the Renters’ Reform Coalition to shape its content.

The White Paper talks a lot about students as the quintessential PRS demographic, so in a mini-series of articles, I am going to analyse the impact on students of the Renters Reform Bill and discuss what next for the student renters movement – starting with the headline announcement, tenancy reform.

Abolition

The Bill will abolish Assured Shorthold Tenancies (fixed-term contracts) along with the ability for a landlord to issue a Section 21 “no-fault” eviction once the fixed term comes to an end. Renters in England will move onto a system like the long-standing one in Germany, and the more recent one in Scotland since 2017, whereby tenancies are “periodic”.

Tenants will be able to stay in their home indefinitely unless the landlord evicts them using one of a prescribed set of “grounds” (such as rent arrears) or tenants can choose to leave just a few months after arriving.

This greater security of tenure will mean, first and foremost, that the hundreds of often vulnerable students that are unfairly evicted by Section 21 ever year will be much better-protected and housing advisers across the sector will be much better empowered to fight back against landlords on issues of tenure.

Secondly, where our current tenancy system encourages student-housing churn, the new regime will facilitate students remaining in properties for multiple years with little hassle.

Students’ ability to seek repairs, home improvements and cosmetic changes from their landlord, who will no longer have the threat of eviction over those who request more, will be drastically improved. This increased security and agency over their home environment can improve student belonging and mental health – students will even be allowed pets!

Town and Gown relations should also improve with student households remaining more stable for longer, being more embedded in local communities and there being less messy mass migration weekends.

Thirdly, for universities outside of London there has been a long-standing issue of ‘brain-drain’ where graduates head swiftly to the capital in search of work when their academic year finishes.

Our current tenancy system has encouraged this, with landlords rarely allowing students the chance to trial being a graduate for a few months in their university town or city. The new periodic tenancy system will ensure graduates look-again at remaining in their current home and area for longer – a major win for regional equality.

On the flip-side, there are also significant benefits for students from the greater flexibility in the forthcoming periodic tenancy regime.

Not yet don’t let

For years, SUs have been forced to run “Don’t Let Yet” campaigns to combat landlord pressure-selling and encourage students not to sign tenancies many months in advance of moving in. This practice has always left students at a bargaining disadvantage with their landlord and left them out of pocket. It has contributed to the mental health crisis by creating anxiety around housing supply and has often left students signed up to a tenancy with a group of friends from freshers week who they do not maintain relations with by the end of the academic year.

Where students’ course, work or personal life suddenly demand that they need to be nearer to a particular location, they are unable to change their housing choice from their initial panic-buy. In the worse scenarios, as we saw en-masse in the pandemic, students have been left paying rent for homes they no longer want, need or are even able to access due to public health restrictions. Whilst we can hope not to see another pandemic in the near future, it is comforting that these changes will be in place for individuals. Furthermore, there are other potential reasons why large numbers of students may need to uproot themselves from their rentals suddenly – for example the sudden closure of their institution.

This pressure-selling of tenancies is a complete anomaly in the PRS and at NUS I took this issue to the Competition and Markets Authority and made it a cornerstone of our lobbying for tenancy reform. The Bill will mean landlords no longer have certainty about when their property will be available for new tenants until their current tenants say so – bringing an end to years of student misery.

In addition, landlords will no longer be able to demand tenancy deposits so far in advance – a practice which has often left students with two tenancy deposits locked away (one for their current home and one for their home next academic year) for months – a real exacerbator of the cost of living crisis for students.

The White Paper also states that landlords will be forced to repay any upfront rent they have charged to a tenant if a tenancy ends earlier than the period that tenants have paid for – and it will limit the amount of rent that landlords can ask for in advance. This is great news for international students and those working-class, estranged and care-experienced students who often struggle to provide a guarantor and are left at the mercy of advance-rent demands.

Othering students?

It must be known that it was a very real possibility that government would choose to exempt students from the new periodic tenancy regime and it is a testament to NUS and allies that this has not happened, yet.

In government’s detailed response to the consultation on tenancy reform published alongside the White Paper – one can see that government took on the arguments NUS made for not exempting students almost word-for-word. However, the landlord lobby has been hammering their case for exemptions very hard for years now and will continue to do so as the Bill passes through a Parliament over-represented by landlords.

Indeed, in Scotland this is still a live issue despite the periodic tenancy regime being introduced 5 years ago. RentBetter has been regularly analysing the impact of periodic tenancies in Scotland and making recommendations to the Scottish Government. As a result of the ongoing complaints of landlords, they have recommended that, “challenges reported by landlords around the practical implications of the PRT (new tenancy regime) in the student market should be explored further by the Scottish Government” and said, “one conclusion would be the need to reconsider the HMO/student market as a distinct or special case in the legislation.” It is fair to say that these recommendations do not reflect the wishes of students in Scotland but are a worrying foreshadowing of the fight ahead of us in England.

To ensure the landlord lobby continues to be defeated on this issue we must begin to consider both our arguments and our tactics as the Bill progresses. On top of the benefits I have already outlined it is important to reiterate that students would be left as nothing other than 2nd class renters were they to be exempted from the new tenancy regime, leaving them open to a variety of abuse. But also, it would be wildly impractical and dangerous for other renters.

If students were living in a home with non-students, should they have different tenancy rights to their housemates? Would a parent in part-time work and part-time study at the Open University be afforded less tenancy rights than another who was in full-time employment? If an individual is a student at the start of their tenancy but then drops out of study mid-tenancy would their tenancy rights change? And let’s not even get started on the number of dodgy HMO landlords renting to vulnerable groups such as migrants who would claim they are renting to students to maintain an easier ability to evict!

How should SUs respond?

But what tactics can we use to mobilise behind these arguments? The student movement should be vocal in celebrating the Bill and pushing for the reforms to be implemented promptly and in-full through their communications channels and the press. SUs could bring together groups of students to explore the proposed reforms in detail and capture what benefit they would have to bolster their messaging.

SUs could explore what data they already have, or could gather, on student renters’ current experiences that would be improved by the Bill. How many student evictions would have been prevented? How many students would have not had to pay rent for empty homes in the pandemic? How many students would have stayed in their area for longer had their tenancy been periodic?

Any existing student housing campaigns in the 2022-23 academic year could ensure they reference the Renters Reform Bill in their messaging to ensure students know what change is on the table and how it could address their current plights. Indeed, where landlords are doing things that are soon to be outlawed, this is a powerful set of campaign messaging to deploy.

SUs could write to their MPs asking them to voice their support for the reforms in Parliament with a particular reference to students. If/when Select Committee scrutiny of the Renters Reform Bill happens, SUs should flood the Committee with evidence and target Select Committee members for lobbying. Finally, the student movement should build alliances locally with renters’ groups, and nationally such as by supporting the work of the Renters Reform Coalition to lobby on the Bill and universities should throw their political weight behind these efforts too for the benefit of students, graduates and local communities.

Finally, the student movement could also begin to explore what is missing from the Bill (an issue I will return to in a later article) and campaign to have these solutions included in the Bill. Renting reform comes around very rarely and should be capitalised upon as much as possible.

All of this is not to say that there won’t be potential challenges of the tenancy reform. Student renting culture will have to align itself much more with that of all other PRS inhabitants – looking for homes weeks and months in advance rather than months and years and getting used to being more embedded neighbours in their community. The issue of joint tenancies in HMOs will need to be explored, so the tenure flexibility of one tenant does not impact the tenure security of the others.

And whilst landlords “leaving the market” in protest at the reforms may have some impact on the sector that should be monitored, ultimately, resigning landlords don’t knock their houses down. Perhaps there will even be opportunities for universities, SUs, student housing charities, local authorities and housing associations or even student co-ops to snap up these crappy landlord’s properties and change the profile of student housing entirely.

7 responses to “Rental reform is coming – what should SUs do next?

  1. Perhaps you could explain what is going to happen, if current students decide to stay in their rental house beyond their studies, to the new cohort of students arriving. As the Private Sector makes up a very significant proportion of available accomodation the new arrivals will have no accomodation to go into.

  2. Most shared student houses in many student areas are subject to either HMO or additional licensing by their local authority. These properties already satisfy a strict housing standard. Therefore cannot be sub standard. In 20+ years operating in the student market I have never had a student group want to stay beyond their contracted period. And why is the PBSA exempt from the proposed legislation?

  3. I have been a landlord letting to students for forty years. If this bill goes through then letting to students will no longer be viable. At the moment the system works and tenants actually contact me to rent my property as early as November/December time for the following academic year. As for the comments which imply substandard conditions: Rory obviously has not seen mine! I have found student housing like my own is popular where students can live with friends independently. The only ones to really suffer will be students who will be forced into University accommodation or the highly expensive PBSA.

  4. Totally agree Yvonne, the other parts of the white paper about decent home standards etc will improve housing stock for students. Like you I offer good standard housing that students book up early. Not having a fixed term in place will ruin the market for all sides. A very poorly thought through suggestion that any rational government will see through and reverse.

  5. Dear Mr Hughes i would like to invite you to Chester to see my student houses which I’ve invested 500k into over last 6 years.
    In this market we need fixed term contracts. What happens in an 8 bed house when one person decides to stay and you’ve signed 8 new people up. How is that going to work. I know the view is that all landlords are bad but there are a few good ones out there.
    If this was your business you wouldn’t be backing it it’s a joke and doesn’t help the student or landlord.
    I await your visit. Landlord tenant Law has become a farce!
    Andy McCready

  6. The arguments given in favour of the abolition of fixed-term tenancies seem pretty weak and omit some very tangible advantages for students. It reads like the author himself was never a student. My own experience as a uni student, as a parent of uni students, and as a student landlord is that students want to live in good quality accommodation and experience uni life with a group of friends for an academic year. Possibly staying in the same house for their final year if they chose. That’s it!

    One of the key arguments is that the students can stay in their house long term. In my experience, the vast majority of students are NOT looking for long-term security of tenure. They DO want to be sure they can book a decent house at a fair rent for the start of the next academic year. The vast majority return to their parental/guardian homes temporarily when they graduate or move to other cities to start careers. Or decide to share with different friends in third year or for higher degree study.

    Just because the proposed legislation does not allow a fixed term to be legally defined in tenancy agreements does not mean that the sector will stop operating on a fixed term basis. There is no choice; it’s driven by how the universities work. Students will still think of their accommodation requirements based around the period of the academic year, will still need to move in en masse at the same time of year (July/September) and most will want to move out at the same time after 1 or 2 years in a property.

    The lack of any type of legally defined fixed term will just make the planning and operation of the student sector much more difficult for students and landlords e.g. there would be reduced certainty that a student home will be empty and available when the new wave of students want to move in. I suspect this will lead to reduced supply, higher rents and will put downward pressure on the quality of housing.

    I’m not sure how the NUS think they are supporting students. If their aim is to undermine the mental health of the student population these changes are a really good way to go about it. Imagine the anxiety of spending the summer not knowing where you are going to live in 2nd year or whether you’ll be able to find a house suitable to accommodate all of your friendship group at an affordable cost. All because it is not clear which houses are available for student rental and when (because there is no agreed fixed term).

    I’m surprised that the article does not explicitly mention the one really clear advantage of the white paper proposal for students. Namely, that they will be able to give notice early to avoid paying summer rent. If I were still a student I would be delighted by this! It would hit landlords’ businesses hard. The subsequent void periods (it being very hard to find replacement tenants) would reduce revenue by 25%+. I would argue that for a well functioning sector to exist the fixed period of commitment from a tenant is necessary (as has been granted to PBSA). Landlord businesses only exist because they can make a profit that justifies the work. I suspect a strong tendency towards reduced supply of student housing, higher rents and downward pressure on the quality of housing.

    But there is so much more detail behind this! Think it through. The NRLA, I’m sure, would happily explain the underlying considerations. All stakeholders really need to be logical and unbiased because the potential for needless damage and very negative unintended consequences is real. Landlords would be very badly impacted but they are resilient and adaptive. I suspect it is students and their families who will really bear the consequences.

  7. If the report in the Times today is to be believed the whole rental reform White paper is being shelved. There were some good things in it but ending fixed term for students wasn’t one of them. Let’s hope us as student landlords can breath again.

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