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Student sector overlooked in landmark legislation – Rowntree

by: Richard Rowntree, managing director, mortgages at Paragon Bank
  • 05/06/2023
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Student sector overlooked in landmark legislation – Rowntree
Last month, the much-anticipated Renters’ (Reform) Bill was introduced to Parliament, marking a key step in what the government has labelled ‘a once-in-a-generation overhaul of housing laws’.

Years in the making and following public consultations and engagement with a range of interested parties, we had a good idea of what would be covered in the 89-page document, and few will have been surprised to see the Conservatives make good on their 2019 manifesto pledge to abolish section 21 of the Housing Act 1988.  

Acknowledging that there are legitimate reasons for landlords to regain possession of their properties, the government has strengthened grounds for repossession under Section 8 legislation. 

While it remains to be seen whether an overstretched court system will be able to manage any rise in repossession hearings resulting from the removal of so-called ‘no fault’ evictions, it is another aspect of tenancy reform that concerns me.  


Unintended consequences 

The replacing of fixed-term tenancies by a system of periodic tenancies has the potential to cause significant disruption on the student market due to tenancies historically being agreed considering term and exam schedules.  

Under the reforms, where provision for repossession under Section 8 only applies to purpose-built student accommodation and educational institutions, students could remain in privately-rented properties for months longer than they would have under the previous system. This would leave landlords in a position of being unable to offer properties for the forthcoming academic year. 

Moving away from the current, long-established system whereby all accommodation is generally listed at the same time would likely limit the options available to students. In addition, if landlords are unable to market properties at a time when students are looking for their accommodation for the year, they may well encounter costly void periods.  

Alongside existing regulations and profits squeezed by increased overheads, we can see how this could severely impact what has been a well-functioning model and be the final nail in the coffin for some serving the student market. 


Greater supply is desperately needed 

If analysis by Stripe Property Group, revealing that there are 3.1 students for every student bed available, is anything to go by, we need more accommodation, not less.  

We saw the serious impact of further pressure being placed on supply when it was reported that students received letters from their universities advising them to withdraw or delay their studies after Glasgow University said a ‘contraction in the rental market’ had led to ‘accommodation challenges’.  

With the Bill still a little way off royal assent, there is a possibility for it to be amended, so we are actively engaging with policymakers to highlight the issue and propose solutions. 

Regardless of the outcome, this shows that it’s important to look beyond the official line that states that the reform delivers a ‘fairer private rented sector for tenants and landlords’.  

While I don’t doubt that this is the intention, the complex nature of providing homes for millions of people with diverse needs means that a nuanced approach is needed.    

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