A leading housing solicitor has raised serious concerns for student landlords about the abolition of fixed term tenancies in the recently published Fairer Renting White Paper.
David Smith of JMW Solicitors states that the scrapping of fixed terms tenancies will mean that new tenancies will be periodic from the start. Student landlords, who have relied on fixed term tenancies that match the academic year, will see tenants given greater rights regarding the length of a tenancy and the giving of notice.
Under the proposed new legislation:
- Tenants can leave a property at any point during the tenancy if two months’ notice is given.
- Landlords will lose the right to gain vacant possession of a property with a no-fault section 21 notice and will have to rely on a judge granting possession for a limited number of grounds.
- A single tenant giving notice in a joint tenancy will terminate the tenancy even if other tenants wish to remain.
- The government has exempted Purpose Built Student Accommodation (PBSA) providers from the legislation.
Smith says “Landlords will also be further disadvantaged as students are likely to give notice at the end of term leaving the landlord with a void period during the summer. Where there is a group of students sharing and one drops out of their course they may also seek to give notice potentially leaving all of the student group without accommodation. This is a major concern to landlords letting to students as reletting a property made vacant during the academic year with new students is not possible.”
He states that the new legislation may well work against the interests of students “It has long been an article of faith for student groups that students should not have lesser tenancy rights than everyone else. That is understandable and for some students will be important. But it hardly reflects the position of the majority of students. Landlords will not be able to have confidence that students will leave and that they will be able to go ahead with new tenancies. Therefore, they are likely to not execute tenancies and leave them in abeyance until they can be sure that they will get possession. This will substantially disadvantage students who will potentially lose properties at the last minute with little opportunity to find an alternative.”
Smith adds “Slightly unfairly the government has also decided to make an exception for student blocks run by providers who are registered with the appropriate code. Why there should be this distinction is less than clear and it is likely to create confusion for students.”
In the same week as Smith’s comments, Housing minister Eddie Hughes has attempted to justify why institutional landlords who manage PBSA have been given a favourable exemption from the government’s introduction of periodic tenancies.
Hughes said “PBSA is distinct to the rest of the PRS. It caters specifically to student needs, is often restricted to housing students due to planning constraints, and it is not designed to offer long-term accommodation.”
“Standards in privately managed PBSA are upheld by government codes, which outline the obligations of PBSA landlords and set benchmark standards for the accommodation they manage.”
“Compliance with the codes also ensures that problems or disputes can be resolved promptly if they do occur. Currently around 95% of PBSA providers are signed up to the codes.”
“PBSA developments are an important part of student accommodation supply.”
“Under our proposed reforms to the private rented sector, private PBSA providers who are signed up to a government-approved code will be exempt from assured status and therefore the new periodic tenancy system.”
“This will make sure that PBSA can continue to provide efficiently run housing in line with the academic year for the students that choose to live there.”