Flawed possession ground will reduce supply of student housing

The National Residential Landlord Association (NRLA) has warned that government plans to restrict a key student housing exemption to larger Houses in Multiple Occupation (HMOs) risk undermining supply and disrupting the annual student rental cycle.

This follows comments made by the House of Lords Housing Minister, Baroness Taylor of Stevenage, during committee stage of the Renters’ Rights Bill on Tuesday. The Minister argued that limiting the exemption under Ground 4A to HMOs with three or more bedrooms “captures the bulk of typical students”. 

However, data from the accommodation search engine accommodationforstudents.com suggests that one- and two-bedroom properties account for around one-third (32%) of all ‘off-street’ student housing.

Ground 4A, as currently drafted, allows landlords to regain possession of properties let to students in line with the academic calendar – but only where the property is an HMO with three or more bedrooms. 

An amendment proposed by Lord Willetts, President of the Resolution Foundation, that was backed by a cross-party group of Peers, sought to extend this ground to include one- and two-bedroom student properties. 

Given that the Renters’ Rights Bill abolishes fixed-term tenancies, Ground 4A is crucial to providing landlords with the certainty that they will be able to guarantee possession of their property at the end of the academic year so they can let to new students. Without extending this to one- or two-bedroom properties, it will be unviable for many landlords to stay in the student housing market.

Ben Beadle, Chief Executive of the NRLA, said:

“We welcome the Government’s recognition that supporting the student rental cycle is important, and we agree with the Minister’s comment that increasing supply is essential to stabilising rents. However, the decision to exclude one- and two-bedroom student homes from Ground 4A will do the exact opposite.

“These properties make up a significant part of the student housing market and are often preferred by final-year and postgraduate students looking for quieter places to live and study.

“The Government’s justification for excluding these homes is misplaced. We recognise the need to ensure security for part-time students, student parents and other vulnerable tenants, but excluding smaller student homes from Ground 4A does nothing to support them.

“If landlords are not confident they can regain possession in time for the next academic year, many will stop letting to students altogether. The result will be fewer homes, higher competition, increased rents, and less choice for students.

“We urge the Government to reconsider this at Report Stage and ensure all student homes – not just larger HMOs – are covered by Ground 4A.”

-ENDS-
 
Notes:

•    Whilst the Renters’ Rights Bill allows Purpose Built Student Accommodation (PBSA) to continue with fixed term tenancy agreements, this will not include ‘off-street’ student housing. The Government has now introduced a new ground for possession (Ground 4A) to enable landlords of qualifying Houses in Multiple Occupation (HMOs) with three or more bedrooms to secure vacant possession so they can be assured that properties will be available to rent at the start of each year.

•    Ground 4A can be found in full on page 172 here. 

•    Amendment 40 to the Renters’ Rights Bill was tabled by Lord Willetts of Havant, a Conservative Peer and President of the Resolution Foundation. It was supported by Baroness Wolf of Dulwich (Crossbench), Baroness Warwick of Undercliffe (Labour), and Lord Shipley of Gosforth (Liberal Democrat). The purpose of the amendment is to remove the current restriction in Ground 4A that limits its application to Houses in Multiple Occupation (HMOs) with three or more bedrooms. The amendment would allow one- and two-bedroom properties rented solely to full-time students to also benefit from Ground 4A.

•    Speaking during committee stage of the Renters’ Rights Bill in the House of Lords on Tuesday 22nd April, the Housing Minister, Baroness Taylor of Stevenage, said: “Amendment 40 seeks to expand Ground 4A… to self-contained accommodation one-bedroom and two-bedroom properties for example… We have thought very carefully about the design of Ground 4A. Limiting it to HMOs captures the bulk of typical students… Meanwhile, students who need more security of tenure, such as single parents living with their children, postgraduate couples living together who have put down roots in an area, or families containing students, will be protected. The core principle of the Bill is that tenants should have more security in their homes… It is only by increasing supply that we will be able to stabilise rents. I do not think that the action proposed in the amendment would have that effect.”

•    The Government has argued that restricting Ground 4A to larger HMOs is necessary to protect tenants such as part-time students and student parents. But Ground 4A only applies when all the named tenants are full-time students. In most cases, that already rules out part-time students and many single parents, who are more likely to be studying part-time or living with non-students. These renters would not qualify for Ground 4A and are already protected under the wider measures in the Bill.

If the Government’s aim is to provide greater stability for single parents, a better approach would be to apply the student criteria based on who lives in the property, not just who signs the tenancy. That would allow smaller student homes to continue operating within the student market, without compromising protection for families. As it stands, excluding one- and two-bedroom student properties from Ground 4A fails to deliver the protections Ministers claim – but it does risk removing hundreds of much-needed student homes from the market.

•    According to the Higher Education Statistics Agency, 31% of students lived in privately rented properties that were not purpose built in 2022/23.

•    According to the accommodation search engine, accommodationforstudents.com, around a third (32%) of all house and flat listings on the platform consist of one- and two-bedroom properties.

•    Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.

•    The NRLA’s press office can be contacted by emailing [email protected] or by calling 0300 131 6363.