The government has confirmed it WILL look at the needs of students and student landlords when Section 21 is abolished.
Students currently sign fixed term contacts – generally per academic year – to live in a PRS home.
However, as axing Section 21 also effectively abolishes fixed term contracts, student landlords could be left unable to find tenants for the next year, as they would need to wait until their existing tenants have given notice, which could be as little as 28 days.
This, in turn, could have a knock-on effect on housing supply for students trying to find somewhere to live, with just a tiny pool of available homes to choose from in advance of the summer break.
All of these factors could put huge amounts of stress on student tenants, especially overseas and post graduates, who are high value students for universities and who need certainty when it comes to where they will be living well in advance.
Fixed term tenancies
In the wake of the government announcement on Section 21 Lord Patten (Conservative) submitted a written question asking whether student landlords and businesses would still be allowed to offer fixed term tenancies for people coming from overseas.
He asked: “Following their announcement of 15th April on changes to the private rental sector, whether it will still be possible for (1) universities, and (2) businesses, to procure short-term lets for people coming from abroad for a defined period; and if not, why not?
In his response the Housing Communities and Local Government minister in the Lords, Lord Bourne, replied saying the issue of student lets would be addressed in the consultation – regardless of where the students are from.
He said: “Following the recent announcement to put an end to ‘no-fault’ evictions by repealing section 21 of the Housing Act 1988, we will shortly publish a consultation on the details of our package of reforms.
“We will use the consultation to test whether specific provisions for different types of housing, such as student accommodation are wanted or needed.”
What does the RLA think?
The RLA recognises the need for student landlords to be able to offer fixed term contracts.
RLA policy manager John Stewart said: ‘It is wholly appropriate that landlords in the student sector should be able to continue to provide the fixed term contracts their tenants want.
“We will be making this point in our submission to the government.”
The issue of student lets is expected to cause issues in Scotland, which has already abolished its version of Section 21 and introduced open ended tenancies.
John Blackwood, chief executive of the Scottish Association of Landlords said that 2018 was a ‘transition period’ for the new rules, and that changes could have serious consequences when it comes to the supply of homes for students.
He said: “When it comes to student lets, fixed term contracts are very appropriate.
“2018 was a transition period, but in summer (2019) I can see there being problems as new tenants will be able to stay as long as they like, giving just 28 days’ notice.
“Landlords will not be able to market their property to students until their existing tenants give notice.
“This means that at the times when students are looking for somewhere to live in the next academic year – usually at least a few months in advance – there will be very few student properties available and landlords and tenants will not have the certainty in knowing they have secured a tenancy for the next academic year.
“The unintended consequence of this change could be that rents will increase, as fewer properties are brought to the student market.
“Alternatively, these landlords, frustrated with the new system, could well decide to move away from the student sector and let to others – reducing the supply of housing to students.”
- The government has yet to publish its consultation on the new repossession process but keep an eye out here and on our social media channels @RLA_News, Facebook and LinkedIn for all the latest news.
- The RLA has launched a campaign asking landlords to contact their MP to talk about how the plans to axe Section 21 will affect them. To add your voice, click here.