A compromise over students emerges on the Renters (Reform) Bill

Now – in a response to the commons Levelling Up, Housing and Communities Committee’s recommendations on the bill, the Government has responded with its intentions for amendments once we’re through second reading.

The committee – like the National Residential Landlords Association – had recommended that the government retain fixed-term tenancies in the entire English student housing sector, but require all landlords letting to students to sign up to one of the existing government approved codes (which cover university and private halls).

It also asked the government to consider ways of preventing or deterring landlords from abusing the exemption, including by introducing financial penalties for those who do not let student accommodation primarily to non-students.

The government’s response recognises that the student market is cyclical – and that removing section 21 will mean landlords cannot guarantee possession each year for a new set of tenants, a key concern for landlords and UUK.

And having engaged across the sector, the government understands the “cyclical model” is critical for landlords’ business models – and ensures a “timely and robust” supply of student accommodation.

But instead of retaining fixed-term tenancies, it has announced that it will introduce a “ground for possession” that will facilitate the yearly cycle of short-term student tenancies.

In other words, it will allow landlords to bring a periodic assured tenancy to an end, which will presumably be restricted to doing so at the end of an academic year.

That doesn’t help students who, until now, were those who DHLUC thought might have local ties or a family to support and who it used to say were those for whom “the security of having a home is crucial”. Care leavers, international students on the graduate route all spring to mind.

The good news, though, is that DHLUC believes that retaining fixed terms would “unfairly lock students into contracts”, meaning they could not leave if a property is poor quality, or their circumstances changes:

Student tenants should have the same flexibility as others.

This is a compromise position that will terrify landlords, but avoid that “locked in” problem I was discussing earlier.

A downside is that students may well clear off in April or May – leaving landlords without their full 12 months’ rent. The danger is that they jack the rent up for the core part of the year – which will be a problem for students who need the housing for the full 12 months.

The other problem is that in theory an individual student in a joint tenancy will be able to serve a “Notice to Quit” on behalf of the group without permission from that group – and so with the right to quit on two months’ notice, if the landlord was then able to swap the group out for another, the remaining students would be rendered homeless.

At one stage earlier on in the year HEPI thought that would be a disaster:

Students would no longer be able to rent a house with a group of their friends – a highlight of the student experience for many. Instead, there will be a bun fight over individual rooms in houses with strangers. Students will still be seeking these rooms as they become available on two-month notice periods. It is concerning that students could be forced into a bedsit lifestyle, with the inevitable knock-on effects of loneliness and mental health on the student population. Landlords may be resistant to this move due to licensing restrictions, and the advantage (to Landlords) of joint tenancies, that each tenant is liable for the rent of all tenants.

In reality, because joint tenancies are great for landlords but hopelessly inflexible for students (because they might fall out or have different needs over time), what the change will likely do is encourage landlords to offer single tenancy agreements for each student in otherwise shared houses – removing the risks associated with being jointly and severally liable for 12 months’ rent. That’s also a win.

On the codes issue, the government says that it’s “not viable” to introduce codes which cover all student housing because of the variety of properties and regulatory burden for landlords.

There will be some alarmist commentary from landlords over all of this – and there’s a long way for the bill to go yet – but this is an announcement over which students can celebrate a bit.

As well as a concession where the government will delay its ban on “no fault” evictions pending court reform, there was one other notable worry while I’m here – the government says it will lower the threshold for eviction in the bill so that “behaviours capable of causing nuisance or annoyance”. The idea is to ensure landlords can take action on a wider range of behaviour than is currently in the bill and make cases easier to prove.

That’ll be a worry for students given it sounds like it could be abused – although the government will legislate to expand the principles that judges must take account of when deciding whether an eviction is reasonable which “could” include giving more weight to the impact on victims and whether the tenant has failed to engage with other interventions to manage their behaviour.