Presentation by Martin Blakey, CEO of Unipol Student Homes at an Accommodation for Students Webinar on the 5th of October. Covers the key aspects of the Renters' Reform bill and the likely impact on students.
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Renters Reform Bill Webinar.pptx
1. Renters Reform Bill Webinar
Accommodation for Students
Wednesday 5th October 2022
Martin Blakey
Chief Executive
Unipol Student Homes
2. The Student Housing Sector
Just over 1.2 million
• 681,000 Purpose built student accommodation beds across the UK in 2021
• 23.6% university’s own beds
• 18.7% private beds used by universities
• 57.7% of beds are direct let into the market
• 551,000 students as living in the off-street market
3. A Fairer Private Rented Sector
The Government’s White Paper on Rental Reform
Housing Standards
Security of Tenure/Stability
Dispute Resolution
Compliance and Enforcement
Positive Renting Experience
12-point Plan of Action
Considerable amount of consultation still due and unlikely to be effective unless after a general election
4. A Fairer Private Rented Sector: Standards
Halve the number of “non-decent” rented homes by 2030
Require the PRS to meet the Decent Homes Standard
Accelerate improvements where most needed
5. A Fairer Private Rented Sector: Tenure
Abolish section 21 (no fault) evictions
Deliver simpler, more secure tenancy structure
Reform grounds for possession to make sure that landlords have effective means to gain possession of
their property where necessary
6. A Fairer Private Rented Sector: Dispute Resolution
No rent review clauses
Rent increases limited to once a year
Ability to challenge ‘excessive’ increases
All private landlords to join Ombudsman
Work with MoJ and HMCTS to target unacceptable delays
Explore extending mandatory redress scheme to private sector PBSA
7. A Fairer Private Rented Sector: Key Points for Student Housing
2-month periodic tenancy in general PRS, but not PBSA
Extended grounds for possession
Compulsory Ombudsman Scheme
Compulsory Redress Scheme?
Property portal
Children and Pets
8. Tenure Changes
Purpose built student accommodation (both private and University provided) will continue to have fixed
term tenancies related to student occupancy
This will relate to being members of “The National Codes” S233 Housing Act 2004
Not clear how this tenure will work or what it will be called
9. Renters Reform Act Proposals: Off-Street HMOs
• removes Assured Shorthold Tenancies and grants 2-month periodic tenancies
• those students living in non-PBSA will be treated the same as any other tenant and can rent and stay
when they want and give two months’ notice and leave at any time
• there would be no contractual fixed-term for students in off-street housing, and landlords would not
know when their properties would be able to be let to incoming tenants
10. Renters Reform Act Proposals: Off-Street HMOs
• it is not clear when properties could be let because, until notice is given, the tenancy just runs. This could mean that
properties could not be let until notice was given, so letting in advance of May (for the academic year beginning in
September) would be unlikely
• the majority of students would have left for the summer before they could secure accommodation for September
• most returning undergraduate students tend to house-hunt as a group, adding additional complexity
• it may appear to benefit students to be able to give 2 months’ notice - but because of the annual letting cycle of
student accommodation - notice given mid-year will make it difficult to rent to other than non-students, and this will
see student properties leave that sector and move into professional letting, reducing availability to students
• student homelessness and a lack of off-street accommodation at the beginning of the year will cause educational
disruption and will increase student homelessness
In Unipol’s opinion, the tenancy proposals would be a major disrupter to the academic experience and very bad news for
the majority of student renters
11. Recent Lessons from Scotland
The Scottish Government recently commissioned the UK Collaborative Centre for Housing Evidence to review student
accommodation, and it reached conclusions on the effect of recent tenure and renting reforms in Scotland that have taken
place across a very short period (around 15 months). The conclusions of that study, in August 2022 are clear:
“When the new private tenancy arrangements for Scotland were legislated for in 2016, this reflected a decade of regulatory
change in Scotland culminating in open-ended tenancies, finite and reduced means of repossession by landlords and a 28 day
cooling off period for tenants at the start of tenancies. It was agreed that students living in university halls or PBSA would be
exempt from this legislation, and that they would continue to be housed under a common law contract with the provider rather
than a legal tenancy.
However, the majority of students living away from home would continue to be in the HMO private rented sector and would be
covered by the new tenancy arrangements, thus creating a division in rights and law depending on what form of
accommodation students choose (or can access).
It is now widely accepted across the sector that as a result of the new tenancy and the experience of Covid-19, private landlords
who hitherto had been content to let to students are now moving away from that market and looking for more long-term
tenants with less chance of void periods. The evidence from Glasgow and Edinburgh appears to suggest that this is shrinking the
available supply for student HMOs and putting upward pressure on rents.”
12. Recent Lessons from Scotland
This shift from students to other groups has happened with lightning speed over what is less than a single
normal tenancy cycle
the University of Glasgow has had to end its accommodation guarantee
https://www.bbc.co.uk/news/uk-scotland-glasgow-west-62493966
Unipol also understands that a similar shift is taking place in Edinburgh and St Andrews, almost most
previous student HMOs have left the normal renters market and moved to Airbnb
13. Student Homelessness
This contraction in the market has led to NUS Scotland noting that 12% of students had experienced
homelessness since starting their studies, with that figure rising to 1 in 3 for estranged (33%) and care-
experienced students (29%). The NUS commented:
A student housing shortage has left hundreds of students in Scotland with nowhere to live in the first few
weeks of their degree.
The National Union of Students for Scotland has highlighted that students are being forced to pay sky-high
rents, experience homelessness, drop out or defer because they cannot find adequate housing.
Students in Glasgow, Edinburgh, and Stirling are among those worst affected, with some landlords increasing
rent to profit from demand.
https://www.nus-scotland.org.uk/articles/alarming-research-on-student-poverty
14. Impact on Rents and Affordability
Off street housing offers a more affordable option to students in their second and third years of study
There is no comprehensive national data available on off-street housing rents for students but using Leeds
and Nottingham
the average rent for an HMO house is £112 and £113 per week respectively for room inclusive of utilities,
water and internet (the standard package) on a 12 month contract
This is some 30% cheaper than PBSA
15. Alternative Solutions
The existing Government proposals already suggest creating some kind of “student tenancy” for those in
PBSA. This should be extended to off-street HMOs in order to maintain the academic cycle and the
availability of properties when students arrive to study
The Government seems to be addressing some downsides of the current system, but these can be
addressed in different ways, other than separating student housing from the academic cycle.
16. Alternative Solutions
Those issues are:
It is difficult to define what a student is.
There are already clear legal definitions of what constitutes a student that can be used to define a student
tenant.
Local residents becoming a student would see their previous tenancy rights reduced
Those who entered into tenancy arrangements before becoming a student could retain their normal
tenancy rights. Students with dependents, who fit more normally into the wider housing market, could be
dealt with in the same way as non-student tenants
17. Alternative Solutions
Students, fearful of retaliatory eviction, fail to report repair issues or problems with their landlords.
Students have access to students’ union and institutional advice services together with many voluntary
accreditation schemes run throughout the country
Most off-street student accommodation falls under mandatory, additional or selective licensing which and
action can be taken under the enforcement procedures within the Housing Act 2004
There is no evidence that students’ concern about security of tenure mans they fail to report problems. In
Unipol’s experience, most students who have problems with their landlord prefer to leave their house and
find somewhere else to live, rather than take time away from their studies to address those issues legally
18. Alternative Solutions
Many students sign up for tenancies far too early and some leave their institutions or fall out with their group
and are unable to leave their tenancies.
Unipol has some sympathy for this view. At present a significant minority of students ask to be released
from their tenancy agreements part-way through their tenancy. The generally accepted practice is to
release a tenant if a replacement student tenant can be found, so that there is no loss to the landlord
It would benefit students to be able to cancel tenancy agreements before starting their tenancies. A
common reason for wanting to cancel is the realisation that the group of friends who entered into a
tenancy agreement do not, after all, want to live with each other.
If students are to have the right to cancel, it should be exercised whilst there are still other students looking
for accommodation
Free cancellation during the period of up to 4 months before the start of the tenancy would be appropriate
19. Reaction and Comment
DLUHC ‘s proposals are already causing off-street landlords to withdraw from the student market and this
will pick up speed over the next couple of years - many universities are rightly concerned
Articles by those who do not understand housing abound
Jim Dickinson of WONKHE recently opined that he hoped student housing rights would not suffer simply
because of student housing shortages…Those supporting these proposals do not take into account the
actual market effect that will be the outcome
in housing policy, maintaining the market is of central importance
Whilst 0.5% of students may benefit, the majority will lose out
It is no good having better housing rights if you cannot find anywhere to live
20. Latest from Government Minister
23rd September 2022
Stephen Morgan MP (Labour, Portsmouth South) asked if DLUHC will make provision for students in the
private rented sector to continue to rent on a fixed-term basis that covers their academic year, as part of
the proposed renters reform bill.
The Minister for the PRS responded:
“We expect most students will continue to move in-line with the academic year. However, the proposed
reforms will support student households who have children or local roots to remain in their properties after
studying if they wish to. It will also mean that students are not locked into contracts when their circumstances
change or if property standards are poor.”
21. The Changing Student Accommodation Market
This is the second year there have been examples of serious student accommodation shortages
Some are well documented:
• Bristol
• Brighton
• York
• Glasgow
• Manchester
But many other universities have only just scrapped by:
• Liverpool
• Leeds
• Newcastle
• Bradford
22. The Changing Student Accommodation Market
What has caused this?
• universities rarely change their recruitment patterns because of student accommodation requirements
• in Bristol, Brighton and York the number of students requiring accommodation is consistently
outstripping supply
• but other universities are now finding supply very tight – they are “surprised”
23. The Changing Student Accommodation Market
Many universities are buying in less PBSA bed spaces and passing that risk to the private sector
the outcome is that many PBSA suppliers are letting earlier to returning students. In the Accommodation Cost Survey the growth of
private sector PBSA direct lets from 2018 to 2021 had increased by 114% and was now 58% of all beds let compared with 24% of
University-owned stock and 19% private sector underwritten rooms
Off-street HMOs are reducing in number: Article 4 planning restrictions has put a corset of supply since 2005-8 (as it was meant to)
but growth of demand from other renters, particularly sharing young professionals is seeing an increasing number of landlords move
to that market, particularly in smaller houses
At the same time, the growth of PBSA bed spaces has fallen (new bed spaces)
2018 - 30,359
2019 - 29,964
2020 - 29,048
2021 - 18,072
2022 - 14,248
In Bristol there are 832, not even enough to cope with this year’s increase. In Brighton just under 700, in York just 368 and in
Manchester only 62
24. The Changing Student Accommodation Market
The shift of off-street HMOs to other markets has speeded up since 2021:
• students were not a great market during two years of Covid
• many landlords have lost money for 2022-2023 on “bills included” deals
• the uncertainties of the proposed changes to tenure make letting to students even more difficult
• there is a generational change of landlords causing property ownership to change and refocus on
better markets.
All this means that off-street HMOs are seriously declining (in Leeds we estimate we have lost 1,600 bed
spaces in the last year), returning students are renting PBSA earlier – those last in the queue are first year
and postgraduate one year taught course students and many are finding accommodation choices very
difficult
This pattern will continue into future years