By Neil Young, Chairman – We Are Kin, written September 2022
The fairer private rented sector (PRS) white paper was published on 16th June 2022. It is the culmination of years of research. Government has worked closely with all stakeholders who are involved in the PRS to inform the white paper.
There is much to be applauded, essentially it takes a helicopter view of the sector and makes some significant changes. These include elimination of S21 (no fault evictions), pets allowed and no discrimination. It aims to bring consistency across the PRS.
However, it currently contains an inconsistency that misses an opportunity. I refer to the student accommodation sector. The homes in this sector are broadly split between PBSA (private and university owned) 45% and student HMOs 55% (per StuRents). The white paper excludes PBSA from the new legislation, but student HMOs are included.
Why has PBSA been excluded but student HMOs have not? The student HMO market houses over 1 million students.
The white paper states:
“Section 21 and Assured Shorthold Tenancies are used by a range of housing sectors. Most students will continue to move property at the end of the academic year. However, for certain students, this is not appropriate, for example because they have local ties or a family to support. It is important that students have the same opportunity to live in a secure home and challenge poor standards as others in the PRS. Therefore, students renting in the general private rental market will be included within the reforms, maintaining consistency across the PRS. We recognise, however, that Purpose-Built Student Accommodation cannot typically be let to non-students, and we will exempt these properties – with tenancies instead governed by the Protection from Eviction Act 1977 – so long as the provider is registered for a government-approved code.”
So, it seems the factors that differentiate PBSA from student HMOs are:
- PBSA generally can only rent to students due to planning
- PBSA will be governed by the Protection from Eviction Act 1977
- PBSA are registered for a government-approved code
This brings an inconsistency to the student accommodation sector and given that the majority of students do not live in PBSA, it will cause tremendous issues to the majority of people renting in this sector. I strongly believe the whole student accommodation sector should be excluded from the new regulations. I have set out below why this is so important:
- Fixed term agreements bring certainty to the rental cycle. Students can sign up to their accommodation in advance (in most cases a few terms in advance) with the knowledge it will be available for the new academic year. With the new legislation, the operator would likely only know whether the beds will be available whilst students are sitting their summer exams
- Friendship groups – a group of friends can no longer look for a house share together as there will be no certainty that all the rooms in the house will be available at the same time.
- Mental health – with the potential uncertainty mentioned above, this will bring added stress to students about where they will live and who they will live with for the new academic year.
- ‘no discrimination’ – the new rules would not allow student HMO operators to only let to students. This would result in beds leaving the sector at a time when there is already a shortage of student homes.
- Safeguarding – following on from the points above, you will have students living independently for the first time potentially with people they do not know.
- Many universities work closely with student HMO homes, would this be invalidated?
My fear here is the rent reform act has unintended consequences. It will add greater stress for students as well as over time reduce the supply of student HMOs at a time when student numbers are predicted to continue to grow.
This is a perfect opportunity to improve the student HMO market. Yes, the current student HMO offering is in many cases sub-standard. So why not apply the same terms that PBSA have to student HMOs:
- Only available to students
- Governed by the Protection from Eviction Act 1977
- Register for a government-approved code
So rather than creating the issues raised above, surely it would be better to force operators of student HMOs to improve the sector. You could even add in some EPC targets too?