Periodic leases will ‘decimate’ student rental sector, NRLA warns – LandlordZONE

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The NRLA says government moves to abolish Secured Short-Term Leases (ASTs) will ‘decimate’ the student housing sector if they continue without change.

Introduced in the Tenants (Reform) Bill, this will see ASTs replaced by more flexible open ‘periodic rents’ which will, in effect, allow tenants to vacate their properties at any time after giving two months’ notice .

While this may give tenants in the general rental market more flexibility, it is likely to cause chaos in the student housing sector.

It is based on striking a balance between students signing up to live in a property for a year and allowing them to move out once they finish their exams, an arrangement that is factored into their rent.

But the government’s plans for indefinite periodic leases with two-month notice periods will have several disruptive effects on the student market, including, as reported by LandlordZONE in August last year, that landlords will find it more difficult to offer students ‘guaranteed’ rooms in houses for the next academic year until current tenants give notice.

Uncertainty

Periodic leases will also create more uncertainty for landlords because if a student decides to vacate a property in the middle of a semester, it will be hard to find a replacement, it is said.

For these reasons, the owners have been calling on the government to amend the reform bill to grant student landlords a “special dispensation” in the same way that purpose-built corporate student accommodation operators have done.

“As it stands, the bill will decimate the student housing market,” he says Ben Beadle (pictured), CEO of the National Association of Residential Owners.

“Open lease plans mean that landlords will not have certainty that rental properties will be available at the start of each academic year.

“The bill will also mean rental periods will only be for one month at a time. As a result, students will not be able to pay rent to cover one term at a time, based on their student loan payments.

“Major changes will be needed if the government wants a viable student housing market.”

david hannah (in the photo), The president of Cornerstone Group International, says: “Student owners have been overlooked in the bill…they are dependent on having a steady income for 12 months, and removing that leaves them with great uncertainty.”

Read more: Ultimate guide to student properties.