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A key amendment has been made to the plans to change fixed-term tenancies to periodic for student landlords. What would periodic tenancies mean for landlords and students, and how will the latest changes impact the sector?

Since the Renters’ Reform Bill was published, landlords and industry experts have had concerns over what the change to periodic tenancies will mean for the student rental market. The current fixed-term system gives landlords and students security from the start of the academic year to when universities break up for summer. However, with periodic tenancies, students may not choose to leave the property in time for the new cohort’s arrival at the start of the academic year or could decide to vacate during term time.

Consequently, the supply of properties available to tenants is at risk, which will undoubtedly drive up rents and put landlords at an increased risk of void periods. For the market as a whole, this will be an additional financial strain on students and make the market less attractive for property investors.


What changes have been announced?

As part of the Bill, purpose-built student accommodation (PBSA) is exempt from changing to periodic tenancies, which many had hoped would be extended to all student landlords. Following recommendations from the NRLA, the government has recognised the importance of the "cyclical model” of tenancies in the student market. However, instead of retaining fixed-term tenancies, the government has promised a new ‘ground for possession’ to facilitate the yearly cohort of students accessing rental properties.

This will allow landlords to end a periodic tenancy in time for new students to arrive, but with the plans to abolish Section 21, it’s presumed this will be restricted to the end of the academic year.

It’s important to note that the compromise here is this will still allow students to leave the tenancy early to ensure they have the same flexibility as other renters. However, the problem remains that landlords could see students leave before the full year has ended, leaving them without a full 12 months’ rent and new tenants to take their space.

Similarly, students typically sign a joint tenancy agreement. In theory, an individual student may serve a ‘Notice to Quit’ without permission from other students, rendering the remaining tenants homeless should the landlord look to swap the whole group for another. In reality, many landlords will need to move from the more convenient joint tenancies (with less paperwork) to individual tenancies to accommodate for increased student flexibility.

Of course, the Bill has not been fully fleshed out yet, and we’re still awaiting further details for how and when the move to periodic tenancies will occur. When we hear more, we will let you know. To discuss your property finance plans, get in touch with our expert brokers on 0345 345 6788 or submit an enquiry here.

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