Student rental market hit by Renters’ Rights Act

As the start of the academic year approaches, industry experts are warning the Renters’ Rights Act has disrupted the student rental market.

Speaking to the Financial Times (FT), a number of lettings experts warn the ban on rent in advance has created barriers for international students.

As previously reported by Property118, under the Renters’ Rights Act, renters can end their tenancy at two months’ notice and fixed-term tenancies will be abolished.

Struggling to access the market

Under the Act, landlords and agents can no longer accept large amounts of rent in advance.

Neil McGimpsey, chief operating officer at Lomond, told the FT that, previously, landlords who rented to students would ask international students to pay several months’ rent upfront instead of providing a UK-based guarantor.

Mr McGimpsey explains: “The act limits landlords to requesting one month’s rent in advance, meaning some students are struggling to provide financial assurances and therefore are finding it difficult to access the market.”

Valerie Bannister, lettings technical director at LSL Estate Agency Franchising, told the FT that the new notice rules have caused chaos in the rental market

She said: “The shift away from fixed-term tenancies in the private student rental market is not without challenge.

“With student tenants now free to depart immediately after their end-of-year exams, rather than paying rent throughout the summer, easy transitions between student households have been lost.”

Gives students flexibility

However, the government claim the Renters’ Rights Act does work for student landlords and tenants.

A spokesperson from the Ministry of Housing told the FT: “Our landmark Renters’ Rights Act gives students the flexibility they deserve by removing fixed tenancies, so they can move as and when their circumstances change.

“It also ensures landlords renting to full-time students can seek possession of their properties in the summer so that they are available for new students to move into at the start of the academic year.”