THIS is why student landlords are worried about Government’s periodic tenancy plans

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Student landlords are becoming increasingly worried about the Government’s plans to bring in periodic tenancies, as outlined within its renting reform White Paper.

LandlordZONE has spoken to three leading landlords who help run the Northampton Student Landlord Network, which has over 100 members.

It is urging student landlords from all over the country (the proposals will affect England and Wales only) to send in their views to the Government’s consultation on the proposed reforms before it closes on 19^th August.

Jacqueline Abbott (pictured), Wes Boswell and Richard Lee, who are all student landlords themselves, say Ministers need to wake up to the damage that their tenancy reform proposals will have on the sector, and in particular students, who will pay higher rents as landlords exit the sector.

This has already happened in Scotland where similar rules were introduced recently.

Abbott says her members are puzzled over proposals to treat purpose built student accommodation (PBSA) differently to traditional student HMOs or shared flats but it’s the changes to tenancies that are causing the greatest consternation.

“It feels to us as if the Government hasn’t realised that the student rental market is unique, and in many ways very different to traditional rentals, so the tenancy changes are going to impact landlords and tenants alike,” she says.

Problems

“The ‘one fits all’ approach of the White Paper needs nuancing if problems are going to be avoided.”

Lee agrees, saying the proposed changes to periodic tenancies are ‘very concerning’. “At the moment we sign agreements with our students that last between nine and eleven months and we’re both tied into that,” he says.

“But under the proposals, students will be able to give two months’ notice at any time.

So as a landlord you will only have two months’ certainty in the contract which, because of the dynamics of the market, means finding a replacement will be very difficult and, because of the expense of additional referencing and guarantor referencing, will make it less attractive.”

Tenants may also then give notice prior to the holidays, or it may persuade more tenants to drop out of their courses because there will be no financial consequences. “This will put more pressure on their housemates who will then have to fill the room or pay more rent,” says Abbott.

Need certainty

“We need contractual certainty so we can plan ahead with our property marketing and tenancy planning, while tenants know they have somewhere to live each year.” The Government’s proposals, the trio say, will put this business model in doubt.

“Recent UCAS figures said it expects an extra 100,000 students every year up until 2025 so it’s a crazy time to be tinkering with the student rental market model,” adds Lee. “Increases in PBSA construction will come nowhere near closing that gap.”

What’s the solution?

The Northampton Student Landlord Network says student accommodation should be identified using the students’ own course registration documents in tandem with local HMO and property licensing schemes so that they can be exempted from the periodic tenancy proposals, as PBSA sector is already going to be. "We already have to supply this information to get our Council Tax exemptions for the properties, so it's not a huge leap to use the same info again for this purpose."

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