Will the Renter’s Rights Bill push up costs for student accommodation?
The Renter’s Rights Bill is set to introduce huge changes into the UK’s property market.
Landlords and tenants alike will see significant upheaval, with fixed-term tenancies abolished, no-fault evictions banned and pets allowed.
But how much will all of this affect students? Unite, which is the largest provider of student housing in the UK, reckons it will have a heavy, and not altogether good, impact – particularly for HMOs.
The Purpose-Built Student Accommodation (PBSA) market has been exempt from a lot of the bill’s provision – like no-faults – but the ‘house in multiple occupation’ (HMO) market is more complicated.
HMO houses refer to shared properties with tenants from more than one household, and are particularly common with university students.
Unite thinks the HMO sector will be “significantly” impacted by the new bill, with students set to face higher costs and a reduced supply of HMO student housing over time as landlords exit.
Unite anticipates the bill to come into effect during the 2025/26 academic year and impact tenancies the following year.
Accommodation costs have shot up
Conservative Peer Baroness Scott of Bybrook has similarly argued that the student housing market is a “finely balanced cycle… if we tamper with it blindly, we risk breaking it altogether.”
“That cycle is already under pressure. Student towns and cities are seeing a decline in student-appropriate housing. If we continue down this road, we will put higher education out of reach for many, in particular those from disadvantaged backgrounds who rely on affordable shared housing,” she told Peers last week.
Student accommodation costs have ballooned in the last five years, with the maximum student loan (£13,348) now less than the average student rent (£13,595).
In the capital, there’s only one student bed per four students.
Bybrook is campaigning for fixed-term tenancies to be available to students in one and two-bedroom houses; houses with three or more students living together have already been exempt.
“Many students, in particular postgraduates, international students and mature students, live in one-bedroom or two-bedroom properties. The current restriction… is both arbitrary and unfair,” she said.
Marc von Grundherr, Director of Benham and Reeves, said that while there is “no doubt” that the bill could push up rents if landlords leave the market, the “impact on the HMO sector specifically is likely to be less severe than Unite suggests”.
“HMOs are typically operated by professional landlords who not only have the expertise and infrastructure to manage regulatory change but also benefit from stronger rental yields compared to standard buy-to-lets.
“For many, this is their core business, and that puts them in a much better position to adapt rather than exit,” he said.