Students Win Right to Bail on Leases, Landlords Warn Rents Will Bail Them Out
Students can now ditch their leases mid-year thanks to the Renters' Rights Act - landlords warn they'll simply pass the cost of empty summer houses onto, you guessed it, students.
The Renters' Rights Act, which came into force in May, was billed as the biggest shake-up for tenants in England in a generation - offering more stability and security to the millions who rent privately. It has also, somewhat inevitably, turned the student housing market into a live experiment in unintended consequences.
The legislation ended fixed-term tenancies, meaning renters are no longer tied into contracts for a specific number of months. For students, that previously meant the full academic year. Now, properties are rented on a rolling basis - tenants pay weekly or monthly with no fixed end date. University-owned halls of residence and Purpose-Built Student Accommodation are exempt and can still offer fixed-term contracts, so this change primarily affects students renting from private landlords.
Take Eddie Lever, 20, who finished his first year at the University of Exeter before deciding the course wasn't for him. He wanted to switch to international relations at the University of York but had already sorted his house for the upcoming year. Thanks to the new act, he only had to give two months' notice to leave and stop paying rent. "If the Renters' Rights Act wasn't a thing, I don't think I would have been able to move universities because I would have been locked into the full [year] contract," he explains.
As he was on a joint tenancy, his departure ended the tenancy for the whole house. Fortunately, a friend looking for a room took his place so his housemates could sign a new tenancy. Eddie acknowledges it would have been trickier without a replacement, but he thinks the benefits outweigh the risk. "If you were to fall out with your flatmates or if you decide that university is not for you, being locked into a full-term contract can be really prohibitive financially," he says. "So without that flexibility, people can really be locked into situations that they don't necessarily want to be in."
Lewis Wilson, vice president for higher education at the National Union of Students, says the flexibility also lets students save money by moving home for the summer - previously, many contracts ran into the summer after courses finished. Wilson adds that students benefit from wider changes in the act, which bans landlords in England from evicting tenants without a reason - giving renters the confidence to ask for repairs without fear of retaliation.
But greater flexibility for students means less certainty for landlords. The act did introduce a specific ground for landlords to evict a group of students at the end of the academic year if they intend to re-let to students. Still, Chris Norris, chief policy officer at the National Residential Landlords Association, says the bigger problem is tenants moving out early - a risk he argues is higher for students (who may fall out with housemates or drop out) than for families, who are less likely to want to move after a few months.
Norris says the end of fixed-term tenancies means student houses could sit empty over the summer - or earlier - and it's now harder to rent a house for just a few months because landlords can't guarantee it'll be available for students again in autumn. He says it's early days and many landlords are treating this year as a test, but warns some may raise monthly rents to cover the risk of void periods, or even sell up or stop renting to students, reducing supply and pushing up prices.
Sue Lawes, who rents three shared houses to students in Norwich, is worried. She doesn't want to put prices up, but if her houses are empty over the summer because students end their tenancy after final exams, she says she may have to. She's already brought forward the start of her tenancy agreements to August instead of September to reduce the risk. Still, if tenants move out earlier, she'd struggle to make a profit while covering her mortgage, council tax and utility standing charges on empty properties. She argues higher monthly rents would mean bigger upfront costs for students and higher overall costs for those who do rent over the summer.
Sue stresses she supports the act's aim of giving tenants greater security and that students should be able to move out if a landlord isn't carrying out repairs. But she wants landlords to be allowed to offer fixed-term contracts aligned with the academic year to avoid summer voids. "Landlords are going to find it very, very hard to absorb those void periods," she says. "Landlords will put prices up and students are going to pay."
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