Despite not being in force yet, the effects of the Renters’ Rights Act on student housing has been palpable.
The Renters’ Rights Bill is officially on the final hurdle of its process in becoming an enforceable Act of Parliament. The substance of the Bill has been finalised, and it has received King Charles’ stamp of approval (legally known as Royal Assent). However, the official execution of the Renters’ Rights Act (RRA) remains dependent on the publishing of Government commencement timelines.
Nonetheless, even before coming into force, the RRA appears to be prompting preliminary changes in the provision of student housing, particularly, for HMOs (Houses in Multiple Occupation).
HMOs are the primary source for student housing, with over three-quarters of domestic students opting to move into private-sector rentals after first year. Such tenancies are notorious for being difficult to obtain, with most university students entering into contracts for the following academic year, a mere two months into their current agreement.
Moreover, student HMOs are infamous for their substantial rent prices. The city of York, in particular, falls third in a StuRents study on the most to least expensive UK cities for student rentals. It boasts an average of £206 weekly rent across the city, which maintains an annual rise with each academic year.
Until recently, HMOs were most commonly let on the status of Assured Shorthold Tenancies (ASTs). Among other terms, an AST sets forth a fixed start and end date for the tenancy. This was especially beneficial for students who were dependent on university term dates. However, the RRA seeks to abolish ASTs, instead converting all existing tenancies to rolling, periodic agreements.
Although the RRA is not in force as of yet, student letting agents, such as IG Property have sent out emails to all tenants informing them of the upcoming changes. These emails state that since the RRA is “scheduled to take effect” during the current academic year, they are changing their rent collection schedules from termly to monthly.
The result of this is that student rent collections that were able to be scheduled to align with Student Finance Maintenance Loan payments are no longer possible. Instead, payments are due to be made monthly.
The reasoning behind such a change is to simplify tenancy contracts and provide the tenant with greater security and choice in their rental agreements. Due to the rolling basis of periodic tenancies, tenants have the ability to stay for as long as they would like. Theoretically, this is favourable as students are no longer confined to paying for months of the year that they are no longer resident in their student houses – for instance, the summer period.
However, it is not without its practical issues. The transition to monthly rent payments is likely to exacerbate financial strain for students, who can no longer synchronise their rent schedules with Student Finance instalments. Furthermore, a recent StuRents survey of over 1000 students has uncovered that 68.6% of students are unaware of the RRA despite its palpable implications on the student housing sector.
As the RRA takes root in the rental landscape of the UK, its impact on student housing will be one to watch. Whether these changes will ultimately benefit or burden students remains to be seen.