- This HEPI blog was kindly authored by Calum MacInnes, Chairman of SAPRS (Student Accredited Private Rental Sector).
With September marking the beginning of the new academic year, most students will now be settled into their accommodation for the year and beginning their studies at universities across the country.
However, with demand for affordable housing increasing, some students must commute to university from their hometowns, couch surf, or even turn down their university offer as they simply cannot find a place to live.
The Renters (Reform) Bill aims to reform the private rented housing sector and deliver a much-needed overhaul of housing legislation. The Bill offers new protections to renters, while also granting new powers to landlords. Some of its key provisions include the ending of no-fault evictions and the ban of fixed-term tenancy agreements for all privately rented properties.
How will this affect students? During the Second Reading in the House of Commons last week, Housing Secretary Michael Gove pledged to ensure that
“the student market […] is regulated in a different way”.
In practice, this will mean treating some ‘purpose-built’ student accommodation differently from private rented housing. Building on a previous blog post by the Higher Education Policy Institute, this post seeks to explore the issues with the current Bill for the student accommodation sector – and why parity between purpose-built student accommodation (PBSA) and the private student rental sector is needed.
The student rental market
Student renting works differently to the rest of the private rented sector. Halls of residence, purpose-built student accommodation (PBSA), and private student housing are available to students looking to live in proximity to their university.
These properties usually offer fixed-term tenancies to students. Fixed-term tenancies offer contracts for up to 12 months, with a clear start and end date, to accommodate for the academic year which tends to run from September to June.
This works for landlords as it provides a guarantee that their property will be made available for new tenants each year. It also works for students, providing them with the flexibility to move properties if their needs change throughout their studies and allowing them to secure a property for the fixed period that they are attending university.
The current version of the Renters (Reform) Bill will ban private student housing providers from offering fixed-term tenancies, preventing the owners of thousands of student properties from offering letting contracts that correspond to university term times. This would have severe consequences for the current student accommodation ecosystem, with students the main group impacted as a result. But the purpose-built sector will be exempt, allowing landlords in the PBSA sector to continue to offer fixed-term tenancies.
The impact on student housing supply
If the Bill remains unchanged, all private student housing tenancies will be open-ended with a two-month notice period. This means students seeking to move out will hand in their notice in April and May without the security of knowing where they will be living the following academic year.
For landlords, this creates uncertainty. As they do not know when, or even whether, their tenants will move out, they cannot be certain their properties will be made available to students for the start of the academic year. Many may choose to leave the market, which will reduce the supply of student housing across the country, turning to other markets which offer greater certainty. In Scotland where the Private Residential Tenancy was introduced in 2017 – banning fixed-term tenancies for private rental properties – we have seen universities signalling that the number of properties available for private rental are at an all-time low.
As the supply of private rented accommodation dwindles, students may have to turn to the PBSA sector. However, this sector is on average 40% more expensive than private rented accommodation, which is usually among the most affordable. And if many private landlords withdraw, the PBSA sector may lack the capacity to meet a surge in demand for student housing.
The effects of this would be felt by students who are already under pressure due to high costs of living. The 2023 National Student Accommodation survey found that 2 in 5 university students have thought about dropping out of university altogether due to rent or bills. British students from lower socioeconomic backgrounds will be particularly affected, and may be priced out of attending university altogether. In 2021, the gap between poorer students and their more affluent peers widened to the largest gap in 14 years. An increase in rent prices, and a lack of suitable accommodation, will make these students even poorer and could increase their risk of dropping out.
The Bill should treat private student housing the same as university-owned and purpose-built student accommodation by allowing the sector to continue to offer fixed-term tenancies. This would allow students to continue to receive quality student housing while ensuring landlords have the security of supply necessary to continue providing properties in line with the academic year.
The need to implement quality standards and consider student wellbeing
Student mental health reached alarming lows during the pandemic, with many students reporting feeling isolated and suffering from the disruption of their lives. Since then, the cost-of-living crisis has caused additional worries for students, as many struggle to cope with the rising costs of housing and groceries.
According to Student Minds, over half of the students surveyed by the mental health charity reported being affected by a mental health issue. Additionally, 83% of students surveyed were also either ‘very’ or ‘quite’ concerned about the current cost of living crisis and 41% said this was having a negative impact on their wellbeing. The 2023 National Student Accommodation survey showed that 43% of students with accommodation issues stated their studies were impacted as a result.
With a current shortage in student accommodation, the reforms may lead to students having to secure accommodation further away from their university, increasing their travel costs. An NUS survey recently found that 46% of students reported the cost of travel takes up a quarter of their weekly budget, and 20% have missed classes due to travel costs. Pushing students further afield to secure accommodation will make this problem even worse. It would also increase feelings of isolation among students, which are already heightened since the pandemic.
Without changes to the Bill, students who rent private accommodation would have to provide notice during the period in which they would be studying for exams, creating unnecessary stress at one of the most important times in a student’s academic year.
Additionally, at present, there are no defined quality standards for private rental student accommodation. The Renters (Reform) Bill should create a framework for the fair treatment of students, embedding the principles of the Decent Homes Standard in the code and protecting students from rogue landlords.
This matters not only to ensure students can have a quality standard of living but also good mental health, an issue of growing concern. If the Bill increases uncertainty over student housing, this may be detrimental for student welfare.
The proposed solution
The aims of the Bill are welcome. With the Bill still in its early stages, it is not too late to ensure that it delivers a better deal for all tenants, including students. On the issue of fixed-term tenancies, the Bill therefore must create parity between the SPRS and the PBSA sector – anything else risks exacerbating the existing crisis.
Our proposed Student Accredited Private Rental Sector (SAPRS) code of conduct would establish standards of conduct and practice for the management of the SPRS distinct from PBSA, aimed at creating a framework of standards to facilitate effective and fair treatment of students. An exemption along these lines is already included in the Bill for PBSA. There is no clear reason why the same exemption should not apply to private rentals.
As Chairman of the SAPRS, I am committed to ensuring the Renters (Reform) Bill enables a fairer rented sector for students. Please get in touch with me if you wish to learn more about the SAPRS and its objectives.