University students could quit tenancies early under Renters’ Rights Act

Student landlords will raise rents to cover a loss of income, as university students could head home six months early under the Renters’ Rights Act.

A story in The Times reports under the Renters’ Rights Act, renters will be able to end their tenancy at two months’ notice and fixed-term tenancies will be abolished.

However, as previously reported by Property118, many industry experts have warned that the Renters’ Rights Act could leave students worse off.

Students might choose to walk away

The Times reports that many university students who study humanities have no lectures in the summer term, and that the period between April and June is used for revision, exams and submitting final essays.

If students hand in their notice in May, when the law is introduced in England, they could finish their contracts in July, rather than August or September.

Chris Norris, chief policy officer at the National Residential Landlords Association (NRLA), explains to The Times: “Depending on the course you’re on, or your circumstances, a student might choose to walk away really quite early in the agreement.

“Some students might be looking at their timetable and thinking, ‘Well, I could be done in six months.’ But they will also have to balance that with at what point they want to move back in with their mum and dad, and how much they enjoy the social side of student life.”

Mr Norris told The Times he would not be surprised if there was a “quite significant” increase in student rent, as landlords adjust to needing to make a profit on a tenancy over eight months rather than 12.

Decrease in stock

Student housing charity Unipol told The Times that an “unintended consequence” of the law change could be a loss of income for landlords, prompting some to sell up.

Nicola Brown, the hub services director for Unipol, told The Times: “How will landlords, solely renting to students, react to a loss of income over time? Will they move the start date to earlier, say a June start date, for new contracts, with an expected notice date in April or May?

“We are unclear how the market will react, but certainly in Nottingham and in Leeds we are seeing a decrease in the number of HMOs [houses in multiple occupation] available for students. A decrease in stock over time could lead to rent rises and less choice.”

As previously reported by Property118, the government has made a U-turn on the student possession ground.

Under the new rules, for student tenancies in houses in multiple occupation agreed before 1 May, landlords will have until 31 May to formally notify tenants that they may use the possession ground to make properties available for incoming students.

Formal notice to repossess a property using this ground can be issued at any time between 1 May and 31 July. However, landlords should be aware that, for one year only, the minimum notice period will be two months rather than the usual four.