How will the Renters Reform Bill affect student accommodation?

On Monday 23rd October, the Renters Reform Bill saw its second reading in parliament, and passed without division. It will now progress through parliament.  

We reflect on how Conservative pushback and pressures from the Opposition could affect the delivery of the Bill's manifesto, and what the outcomes of the Bill passing could mean for the future of the student accommodation sector.

What is the Renters Reform Bill?

The Renters Reform Bill completed its first reading in parliament by the Government on 17th May 2023, four years after Theresa May's government announced its plans to scrap 'no-fault' evictions back in 2019. It outlined plans to significantly reform the private rental sector (PRS). In particular, the Government has reiterated its intention to abolish Section 21, or 'no-fault', evictions, the misuse of which are cited as a leading source of homelessness in the UK. Under the Government's new proposal, landlords will only be able to evict a tenant under reasonable circumstances, such as anti-social behaviour. There are plans to strengthen Section 8, which allows landlords to end a tenancy early if they have legal reasons to do so.

Since proposing the Renters Reform Bill, the Government has faced increasing pressure to fulfil their outlined pledges. On 16th October 2023, charities including Shelter, Citizen's Advice, and The Trussell Trust published an open letter urging the prime minister to deliver on his promises. 

However, despite the benefits of greater security for tenants, there are legitimate concerns over how some of the proposed reforms will affect the wider accommodation sector, particularly within the student market. 

What does this mean for the student accommodation market?

As part of the move to abolish Section 21 evictions, the Government plans to shift all Assured Shorthold Tenancies onto a single system of periodic tenancies. There was immediate concern from the sector about how this could affect the student accommodation market, which primarily operates using fixed-term tenancies. 

Both students and landlords currently benefit from the security of fixed-term tenancies that last for the entirety of the academic year. On 20th October, the Government released a response to some of these concerns, acknowledging that the academic cycle is critical to how student landlords can maintain 'the timely and robust supply of student accommodation'. Therefore, they intend to introduce a new ground for possession that will accommodate the yearly cycle of short-term student tenancies.

However, this still reduces security for students. As StuRents co-founder, Tom Walker, notes, 'This approach reduces certainty for students as their departure date is no longer defined at the outset, but is instead dependent upon when the property manager chooses to serve notice'. 

Walker continues, 'There is also no mention of any concession around rent payments which, under the current form of the Bill, are limited to one month's rent. Most domestic students opt to pay rent termly or quarterly to align this large outgoing with their maintenance loan. A failure to accommodate this will place significant pressure on many students' cashflow'.

Is Conservative pushback against Section 21 protecting the student market?

During the second reading of the Bill in Parliament, there was significant pushback on the ban on Section 21 evictions from Conservative backbenchers. Michael Gove has confirmed that the implementation of the ban will be delayed until court systems have undergone significant reform to speed up key processes. While the measure will remain in the Bill, the Government has received backlash from Labour for the proposed delay.

Angela Rayner referred to the Government as having 'betrayed renters' by carrying out 'a grubby deal' with Tory backbenchers, many of whom are landlords themselves. She stated, 'Tens of thousands more families who the Government promised to protect, now face the prospect of being threatened with homelessness or kicked out of their homes by bailiffs'.

However, the delay to Section 21 does not only protect the interests of landlords, but of student tenants too. As Tom Walker notes, 'The Government now finds itself in a position in which it either expedites the Bill at the expense of the student sector or defers the bill at the expense of many tenants in the wider private rented sector'.