When the Renters’ Rights Act came into force in May it was described as the biggest change for tenants in England in a generation, giving more stability and security to the millions of people who rent from private landlords. The legislation has also prompted a shake-up of the student rental market, which has posed challenges for landlords as it allows people to leave a tenancy rather than being tied in for the full academic year. Eddie Lever had finished his first year at the University of Exeter when he decided the course wasn’t for him. The 20-year-old wanted to switch to studying international relations at the University of York but had already organised his house for the upcoming year.
The tenancy was signed and had started. But because of changes in the Renters’ Rights Act, Eddie only had to give two months’ notice before he could leave and stop paying rent. The legislation ended fixed-term tenancies – where renters are tied in to contracts for a specific number of months. For students, previously contracts were generally for the full academic year.
Instead, properties are now rented on a rolling basis, which means tenants pay rent weekly or monthly with no fixed end date. University-owned halls of residence and Purpose-Built Student Accommodation are exempt, external and can still offer fixed-term contracts so this change primarily affects students renting from a private landlord. “If the Renters’ Rights Act wasn’t a thing, I don’t think I would have been able to move universities because I would have been locked into the full [year] contract,” Eddie explains. “It would have made it unaffordable.” What the Renters’ Rights Act means for tenants and landlords ‘I fought for change to remove student housing stress’ More students planning to live at home for university over ‘insane’ living costs As he was signed up to a joint tenancy, when he left it ended the tenancy for the whole house.
Fortunately, Eddie had a friend who was looking for a room who was able to take his place so his housemates could sign a new tenancy. He acknowledges the situation would have been more difficult for his housemates if there wasn’t someone who could take his room. However, Eddie thinks the benefits for students are worth this risk. “If you were to fall out with your flatmates or if you decide that university is not for you, being locked into a full-term contract can be really prohibitive financially,” he says.
“So without that flexibility, people can really be locked into situations that they don’t necessarily want to be in.” Lewis Wilson, vice president for higher education at the National Union of Students, says this flexibility means students can also save money on rent by moving home for the summer. While previously, many student rental contracts ran into the summer after courses had finished, students can now choose to move out earlier if they want. Wilson says students also benefit from wider changes in the act, which bans landlords in England from evicting tenants without a reason. Campaigners argue this gives renters greater security and confidence to ask for repairs, without fearing they could be evicted if they raise concerns.
However, greater flexibility for students to leave tenancies also means less certainty for landlords. The act did introduce a specific ground, external for landlords to evict a group of students at the end of the academic year if they intend to re-let the property to students. Chris Norris, chief policy officer at the National Residential Landlords Association, says the bigger problem for student landlords is if their tenants choose to move out earlier. He argues this is a bigger risk for students – who may fall out with their housemates or drop out of university – than, for example, families, who are less likely to want to move out after just a few months.
Norris says the end of fixed-term tenancies means student houses could be left empty over the summer after courses finish – or even earlier. He adds that it is now more difficult for student landlords to rent a house for just a few months as they don’t know how long the tenants will stay and can’t guarantee it will be available for students again in the autumn. Norris says it’s early days for the new legislation and many landlords are taking this year as a test to see how these issues play out in practice. However, he warns that some may choose to increase the monthly rent they charge to cover the risk of their properties being empty over the summer.
In some cases, he says landlords may even sell up or stop renting to students, reducing supply and pushing up prices. Sue Lawes, who rents three shared houses to students in Norwich, is worried about the changes. While Sue says she doesn’t want to put up her prices, if her houses end up being empty over the summer because students decide to end their tenancy after their final exams she says she may have to. She has already brought forward the start of her tenancy agreements to August instead of September to try and reduce the risks of this.
However, she says if her tenants move out earlier in the year she would struggle to make a profit, whilst covering costs including her mortgage, council tax and utility standing charges when the properties are empty. She argues higher monthly rents would mean bigger upfront costs for students and higher overall costs for those who do choose to carry on renting over the summer. Sue stresses that she supports the aim of the legislation to give tenants greater security and that students should be able to move out if their landlord is not carrying out repairs. But she wants landlords to be allowed to offer fixed-term contracts to students in line with the academic year to avoid properties being left empty over the summer.
“Landlords are going to find it very, very hard to absorb those void periods,” she says. “Landlords will put prices up and students are going to pay.”
