While fixed-term tenancies will continue to be the standard for purpose-built student accommodation, it is proposed that residential property that is being used to house students remain included in the upcoming tenancy reforms. 

There are two main concerns regarding the abolition of Assured Shorthold Tenancies (ASTs) for students:

1. To maintain an effective student lettings market, properties need to be available for each academic year.
2. Vacant properties after the academic year are difficult to re-let until the next cycle.

The current Bill addresses these concerns to some extent:

1. Universities can still rely on the exemption in paragraph 8 of Schedule 1 of the Housing Act 1988, which allows them to let to students through “specified educational institutions.”
2. Universities will benefit from a mandatory ground for possession (ground 4) that enables short-term lettings, such as summer conferencing or other temporary uses.
3. The Bill’s guidance states that Purpose-Built Student Accommodation (PBSA) will be exempt from these changes if providers are registered under government-approved codes, since these tenancies are not assured. The House of Lords has amended the Bill to give the Secretary of State authority to create regulations classifying certain student landlords or buildings as outside the scope of the legislation, allowing PBSA providers to grant standard law tenancies without the protections afforded to assured tenants.
4. Additionally, there is relief for houses in multiple occupation (HMOs) rented to students, featuring a new mandatory possession ground (ground 4A). This allows landlords to regain possession of student HMOs to re-let to students for the upcoming academic cycle. Importantly, landlords must provide written notice to tenants before using this ground, informing them of the landlord’s intention to repossess the property for this purpose.

The Bill’s revision to require a minimum two-month notice period to end a periodic tenancy weakens the landlord’s position concerning the second concern. The potential risks for student landlords who cannot rely on the exemptions mentioned earlier include:

1. Students may time their move-out to coincide with their final exams, resulting in rental income gaps during the summer break.
2. Students who decide that a course isn’t suitable for them might leave during the Michaelmas term, leaving a void—or a partial void in HMOs—for the remainder of the academic year.

Universities are likely to be worried that these voids will lead to higher student rents, either because landlords seek to offset anticipated loss of income or because they shift their properties to other sectors less affected by cyclical vacancies.

Ground 4A possession rights

The Bill introduces a mandatory possession ground (Ground 4A) that enables landlords of student HMOs (houses with three or more tenants) to recover possession at the end of an academic year. The House of Lords has proposed extending Ground 4A to include one- and two-bedroom student rentals as well. 

This extension aims to protect the student lettings cycle across the entire market. However, it still requires approval from the House of Commons. If Members of Parliament reject this amendment, smaller student accommodations—such as one- and two-bedroom units—could lose this important safeguard.

Conclusion

Student renters on assured tenancies will benefit from several immediate advantages, including the ability to give two months’ notice and the significant benefit for financially struggling students of only needing to pay rent four weeks in advance. In the longer term, these tenants will also be protected by minimum standards established under the Decent Homes Standard and will have access to a right of redress through an ombudsman, providing additional safeguards and support.

Of course, some may argue that these immediate benefits could be offset by concerns that the Act might lead to a reduction in the overall supply of student housing, potentially causing rent increases. There may also be a rise in the use of guarantors and higher deposit levels as landlords seek to mitigate the risks associated with shorter rent payment periods. Additionally, most shared student houses (HMOs) are already subject to licensing, which should ensure they are safe and well-maintained.

Ultimately, the true impact of the Act on the market and on students remains uncertain. Therefore, it will be important to closely monitor how these changes influence students’ and access to housing in their local property markets.