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Student housing supply threatened by ban of fixed-term tenancies

Property 118 // SAPRS Chairman Calum MacInnes’ comment in Propery 118.

The ban on fixed-term tenancies for students will create “severe consequences” in the private rented sector, warns expert.

Calum MacInnes, chairman of the housing organisation, Student Accredited Private Rental Sector (SAPRS) demands the government treat private student housing the same as purpose-built student accommodation (PBSA) by allowing the sector to continue to offer fixed-term tenancies.

Under the Renters’ Reform Bill, university-owned accommodation will still be able to grant fixed-term tenancies.

Uncertainty for landlords

The government said in a Levelling Up Committee’s report on reforms to the PRS: “We believe retaining fixed terms would unfairly lock students into contracts, meaning they could not leave if a property is poor quality, or their circumstances change. Student tenants should have the same flexibility as others.”

The government has instead proposed introducing a new ground for possession for student tenancies so that landlords can serve notice to coincide with the academic year.

Writing on the Higher Education Policy Institute (HEPI) website Mr MacInnes said the proposals by the government will create even more uncertainty to landlords.

He said: “If the Bill remains unchanged, all private student housing tenancies will be open-ended with a two-month notice period.

“This means students seeking to move out will hand in their notice in April and May without the security of knowing where they will be living the following academic year.”

He added: “For landlords, this creates uncertainty. As they do not know when, or even whether, their tenants will move out, they cannot be certain their properties will be made available to students for the start of the academic year.

“Many may choose to leave the market, which will reduce the supply of student housing across the country, turning to other markets which offer greater certainty.”

Surge in demand for student housing

Mr MacInnes pointed out that Scotland banned fixed-term tenancies in 2017 which he says has not improved supply issues.

He said: “In Scotland where the Private Residential Tenancy was introduced in 2017 – banning fixed-term tenancies for private rental properties – we have seen universities signalling that the number of properties available for private rental are at an all-time low.

“As the supply of private rented accommodation dwindles, students may have to turn to the PBSA sector. However, this sector is on average 40% more expensive than private rented accommodation, which is usually among the most affordable. And if many private landlords withdraw, the PBSA sector may lack the capacity to meet a surge in demand for student housing.

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