The Renters’ Rights Bill is set to introduce significant changes to tenancies in England, and student landlords are among those most likely to feel the impact. This new legislation will fundamentally alter how tenancies can be ended, and the changes could limit accommodation options for students across the country.
At the Bill’s Second Reading, Secretary of State Angela Rayner MP commented that “the unique circumstances of students” had been considered in the legislation, while Housing Minister Matthew Pennycook MP acknowledged that student accommodation is an area where “judgements are finely balanced.” These remarks reflect the complexities involved in the student rental market, which faces distinct challenges when compared to other types of tenancies.
Abolishing Fixed-Term Tenancies
One of the most significant changes in the Renters’ Rights Bill is the abolition of fixed-term tenancies. Under the new law, tenants will be able to give just two months’ notice to end the agreement, at any point during the tenancy. The Government is of the opinion that this will help prevent tenants from being “trapped” in substandard accommodation. While this new flexibility may seem like a win for tenants, it creates a considerable challenge for student landlords.
For student landlords, this “flexibility” means that tenants could leave in the middle of an academic year, disrupting both the tenancy cycle and the landlord’s financial planning. Currently, most student tenancies run on a fixed-term basis that aligns with the academic year, providing both parties with a clear, predictable schedule. Without this structure, landlords face the risk of unanticipated vacancies, which could be particularly damaging in areas with a high concentration of student properties.
What Does This Mean for 2025/26 Tenancies?
A more immediate concern for student landlords is how the Renters’ Rights Bill will affect tenancies for the 2025/26 academic year. The Government has indicated that the legislation could be in force by summer 2025, with no moratorium for existing tenancies, meaning that any tenancy agreements provisionally arranged before the Bill receives Royal Assent but due to start after the new rules are implemented will need to be re-drafted to ensure compliance. However, until the secondary legislation clarifies the terms of these new agreements, landlords are left in a state of uncertainty.
Mandatory Possession Ground: A Limited Solution
To address the concerns of student landlords, the Bill introduces a new mandatory ground for possession (ground 4a) that would allow landlords to regain possession of their properties in line with the academic year. However, this provision comes with limitations. Ground 4a will only apply to Houses in Multiple Occupation (HMOs), meaning landlords of 1- and 2-bed student properties will not benefit from the new rule.
In some areas, 1- and 2-bed properties make up as much as 20% of the student accommodation market, so excluding them from this provision could significantly reduce housing options for students. The Government’s rationale seems to be rooted in the need to offer greater security of tenure to students with families, but the unintended consequence may be that students are pushed into larger HMOs, living only with other students, regardless of their preference.
Additionally, ground 4a will only be available if the property is let entirely to full-time students or those expected to become students in the next academic year. This means landlords will need to ensure that prospective tenants meet these criteria, adding another layer of complexity to an already challenging market.
Rent Payment Changes: A Shift in the Status Quo
Another significant change in the Renters’ Rights Bill is the ban on landlords taking more than one month’s rent in advance. In the student sector, rent is typically paid quarterly to align with student loan disbursements, a system that has worked well for both landlords and tenants. However, under the new legislation, students will be required to pay rent monthly, potentially creating difficulties for those who have structured their budgets around their loan payments.
This shift could create unnecessary complications in a sector that already functions efficiently in this regard. Both students and landlords will need to adapt to this new payment schedule, which could introduce friction into the process of renting student accommodation.
Proceed with Caution
Given these upcoming changes, landlords should proceed with caution when securing tenants for the 2025/26 academic year. It may be wise to secure tenants provisionally whilst refraining from signing any binding agreements until the secondary legislation provides more clarity on the rules. This approach will help landlords avoid the risk of non-compliance and ensure that both they and their tenants are protected under the new legal framework.
While the Renters’ Rights Bill aims to improve tenant protections and address substandard housing, the changes it introduces will have a profound impact on the student rental market. Landlords should stay informed and be prepared to adapt their practices to meet the new legal requirements.
As Landlords and Investors ourselves, we can help and advise on all aspects of your portfolio. If we can help you then give us a call on 0117 440 6789 or email us here together we can make being a landlord simple, passive and stress free!
KPA are a letting agency specialising in single lets, family lettings, landlord property portfolios and HMOs.
