The exemption is part of the Renters’ Rights Bill, which entered the committee stage in the House of Lords earlier this week.
The National Residential Landlords Association (NRLA) said Ground 4A allows landlords to take possession of properties let to students in line with the academic calendar, but only where the property is an HMO with three or more bedrooms.
Baroness Taylor of Stevenage said limiting the exemption under Ground 4A to HMOs with three or more bedrooms “captures the bulk of students”.
However, the trade body said nearly a third of off-street housing is one or two-bedroom properties.
An amendment that has been proposed by Lord Willetts, president of Resolution Foundation, has been backed by a cross-party of peers and seeks to extend this to include one- and two-bed student properties.
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The NRLA said that as the Renters’ Rights Bill intends to abolish fixed-term tenancies, Ground 4A is “crucial to providing landlords with the certainty that they will be able to guarantee possession of their property at the end of the academic year so they can let to new students”.
The trade body said if it is not extended, it will be “unviable for many landlords to stay in the student housing market”.
Ben Beadle, chief executive of the NRLA, said: “We welcome the government’s recognition that supporting the student rental cycle is important, and we agree with the minister’s comment that increasing supply is essential to stabilising rents. However, the decision to exclude one- and two-bedroom student homes from Ground 4A will do the exact opposite.
“These properties make up a significant part of the student housing market and are often preferred by final-year and postgraduate students looking for quieter places to live and study.”
He continued: “The government’s justification for excluding these homes is misplaced. We recognise the need to ensure security for part-time students, student parents and other vulnerable tenants, but excluding smaller student homes from Ground 4A does nothing to support them.
“If landlords are not confident they can regain possession in time for the next academic year, many will stop letting to students altogether. The result will be fewer homes, higher competition, increased rents, and less choice for students.
“We urge the government to reconsider this at report stage and ensure all student homes – not just larger HMOs – are covered by Ground 4A.”
