As the Renters' Rights Bill (the "Bill") makes its way through the Committee Stage of the House of Lords, its implications for student accommodation have emerged as one of the more technically difficult areas to address.
In this blog, we look at the challenges facing the sector, and whether there is anything that Purpose Build Student Accommodation ("PBSA") landlords can do to safeguard their position against unintended consequences of this legislation.
Under the 'old' regime, before the liberalisation of the residential letting sector effected by the Housing Act 1988, far fewer young people went to university and the number of overseas students in the UK was tiny. Tenants' rights were – practically speaking - nascent and landlords had robust attitudes to their tenants.
Nearly forty years later, the student body has grown enormously, with at least a third of British young people attending university, and a huge influx of overseas students. To house the increasing numbers, a new PBSA investment sector has evolved . This supplements the university owned accommodation and the traditional private sector housing which caters for the needs of the student body often in large shared houses .
University-owned accommodation has never been caught by housing legislation, whether under the regulated pre-1989 regime, or under the Housing Act 1988. While university residential accommodation is often spartan, politically, it has been felt that universities can be trusted to continue to provide this type of accommodation. This remains the position, although universities sign up to a code of practice for the management of student housing.
Many PBSA providers offer self-contained accommodation to wealthier, international students, often post-graduates who want a higher standard of living for themselves and their families. PBSA providers are (largely) caught by the housing legislation, so grant assured shorthold tenancies ("ASTs"). Historically this has not been a problem, because they could grant a fixed term tenancy for the academic year. This will however not be possible when the Bill becomes law, as one of the key proposals of the legislation is that it will abolish ASTs.
Following lobbying from stakeholders, the government introduced an amendment during committee stage in the House of Commons in 2024 to give landlords a new ground for seeking possession from full-time students at the end of the academic year. This largely satisfied the private rented sector. Ground 4A of the Bill applies only to full-time student properties, which are additionally licensed as Houses in Multiple Occupation ("HMO"). (HMOs are residential units where three or more people live together sharing facilities, who are, crucially not a family unit.)
PBSA tends to have smaller residential units, typically one or two bedroom flats, targeted at a different demographic from those using the private rented sector. PBSA therefore potentially still remains within the scope of the Bill. The Housing Minister, Matthew Pennycook, told the House of Commons that the Bill was not intended to catch PBSA providers, but that to be exempt from the Bill they would need to sign up to an existing National Code for landlords, approved by secondary legislation.
Whilst the matter was debated at length in the House of Lords in the session on 22 April 2025, no government amendments were made to insert this concession into the Bill. It is thought likely that this will now have to be dealt with by means of secondary legislation.
However, even with HMO properties, there are potential problems, at least during the first year of the Bill. Ground 4A requires a notice to be served on students before they enter into an agreement to which Ground 4A applies. The Bill may receive Royal Assent before Parliament's recess at the end of July. By this time in the academic year, however, many students will already be unpacking in houses and have entered into their tenancy agreements, and so it will be too late for any 'traditional' student landlords to serve a Ground 4A notice. This means that when the Bill passes into law, these AST student tenancies will be automatically transmuted into fully assured periodic tenants and the landlord cannot be confident that it will be able easily to regain possession at the end of the term. Conversely students may realise that they can give a month's notice to end the tenancy when the academic year is finished, leaving the landlord with unexpected voids.
This potential issue will also apply to PBSA landlords, even supposing they are brought within Ground 4A during the next academic year. If, however, they are not exempted, or do not sign up to the National Code, they may find themselves with tenants that they cannot remove when the contractual term of the tenancy ends.
Conversely, PBSA students may give the one month notice period and leave landlords with voids that will be difficult to fill outside of the usual rhythm of the academic calendar. Some landlords may be tempted to instal non-students to fill the voids, potentially putting them in breach of planning requirements and their loan covenants.
The government sees this Bill as politically significant and its early passage onto the statute book as an important win. Unfortunately, with rushed legislation comes the risk of unintended consequences, some of which we have outlined above. Just as the Housing Act 1988 generated an enormous amount of litigation as the details were worked out in the courts, it is likely that this Bill will have the same effect. It would be sensible for landlords and their advisers to pay close attention to this legislation to see how the new regime will potentially affect their businesses and whether it will be possible to mitigate any challenges.
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