Renters' Rights Bill

Written evidence submitted by the Nottingham Students Partnership on behalf of the University of Nottingham Students’ Union (UoNSU) and Nottingham Trent Students’ Union (NTSU) (RRB65)

1. This is written evidence to the Renters Rights Bill Committee on behalf of the University of Nottingham Students’ Union (UoNSU) and Nottingham Trent Students’ Union (NTSU), through the Nottingham Students Partnership. We hope that our experience representing over 70,000 students annually will provide members with a greater understanding of the issues faced by student tenants, and what should be factored into consideration of this bill.

Summary

 

Our evidence highlights some of the main issues students face as tenants in the Private Rented Sector (PRS), including:

· There is a substantial, annual demand for tenancies as well as diverse range of students with varying needs.

· Students are facing particularly acute difficulties with the cost of living, in part due to the cost of renting.

· Student tenants have little knowledge of their rights and complex process.

· Long periods to resolve difficulties disincentive students from making complaints and entrench issues of quality.

· The scale of quality issues in the student PRS continues to grow.

To improve the bill, we make the following suggestions:

· Introduce a simple, two-week turnaround for Ombudsman complaints.

· Expand the ombudsman to include Letting Agents and replace the existing, separate redress schemes.

· Consider how rent guarantors could be reformed to ensure access for all.

· Retain the ban on landlords requiring advance rent but consider allowing tenants to offer advance rent to help budget or allay affordability concerns.

· Consider introducing a clause preventing ‘no-student’ policies.

We also further ask the committee to:

· Retain ground 4A for students in HMOs only.

· Resist calls for further segregation of student tenancies.

· Ensure one ‘notice to quit’ does not evict joint tenants.

· Recommend that, for the database to be fully effective, it should be kept up to date with details of any managing agents and applicable licences.

As the Bill does not currently contain reference to Purpose Built Student Accommodation (PBSA), we have restricted our comments to students in the Private Rented Sector, however, many of our comments with the exception of those regarding Tenancy Changes are relevant to the rental experience in PBSAs.

Tenancy Changes

 

2. In our experience, students are typically on a fixed term assured shorthold tenancy with a mixture of lengths. In Nottingham, this makes up a high proportion of the student market. How competitive the local market it typically determines the length of these contracts, i.e. if student landlords are able to charge for rent over the summer. In Nottingham, we tend to see a mixture of 48 week and 51/52-week contracts, although the latter is more common, especially in recent years.

3. There are a variety of housing needs amongst the student population, such as the postgraduate cohorts of January-December and September-September for research students with September submissions. At the University of Nottingham, we also have a 600-ish strong April-April cohort of Veterinary students. Students on placement years sometimes require tenancies for as short as a term in a different city, as well as for when they return to university.

4. Some of these, (such as the April Vet students), are well served by properties which have fallen into a ‘niche’ of letting for those periods, whereas others – for example students on placement seen particularly at Nottingham Trent University where there is a huge focus on in-work experience – see students struggling to find a landlord willing to negotiate or meet their circumstances.

5. This diversity of need will be well served by a move to periodic tenancies across the board, as it will give students the opportunity to secure a property for the period they need it, without there needing to be a specific market niche.

6. Whilst a two-month notice may increase the risk for tenants having an ‘overlap’ where they are paying for two properties in the same period, this gives both the tenant time to find new housing and the landlord appropriate time to gain new tenants. Longer periods would increase the tenants’ burden too far, leading to landlords collecting rent on empty properties, increasing the risk of properties being unavailable when they are needed, such as for students termly return.

7. Whilst the student market is diverse, there is a substantial proportion - typically undergraduate students – which follow an annual cycle of tenancies. This is beneficial for landlords they can increase rents annually without serving a notice or a rent review clause, with the high demand means tenancies are secured months in advance, almost eliminating uncertain void periods. However, this also creates substantial demand for tenancies starting at a similar time of year, which is not replicated by any other sector of the private market on the same scale.

8. This justifies the new ground 4A for students in HMOs, as it regularises this annual change over and maintains it as a predictable sector of the market. It does not, however, justify the idea posed elsewhere for a ‘student specific’ tenancy which would remove the advantages of a simpler letting system and could not take into account the diversity of the student housing need.

9. We do have some concerns on how this will affect the letting of properties to mixed groups, as we quite often see households with one student on a placement, temporary interruption of study, at different universities, or a part-time or postgraduate course with a different term dates to other tenants. We do not believe it should be the intention of the bill to eliminate these tenancies.

10. We also note with concern the argument advanced by landlord lobby groups that some students may give notice to end their tenancy early, so as to avoid paying for an empty property over summer, and the subsequent threat that student landlords will raise their prices over the summer to accommodate this. We do not believe, however, that this possibility should override the tangible benefit for students who wish to leave their tenancy (see ¶12)

11. There are still substantial portions of students living in the non-HMO PRS who would not currently be covered by ground 4A. Many of these students have deliberately chosen to live more independently and may desire the security of a periodic tenancy. Others still will leave of their own volition at the end of their academic year. Whilst there is some risk of erosion, this segment of the student PRS less reliant on a synchronous annual turnover and does not justify the complete segregation of student lettings into a separate market or the removal of rights from those who would like to enjoy them.

12. We believe it is important for tenants to have the option to vacate a tenancy, without being tied to a fixed periods – Our experience includes supporting students whose circumstances have changed such as through failing a course, urgent medical need or a move to another university. These cases are typically inherently stressful, often with a life-changing impact, and it is right that they should be able to end a tenancy without additional cost and stress. 

13. In our experience students in HMOs are either jointly responsible for the rent through a joint tenancy, or responsible only for their room on an individual tenancy. In the former cases (which we see most often in Nottingham), tenants may have the option to find another student to fill a vacant room or pay the remaining rent, whereas the latter may offer the same to the landlord. It is unclear if the changes in tenancies will affect this, and we would like to stress the importance which students place on being able to choose their own housemates.

14. It is also vital that the changes in tenancies do not create a situation where one tenant providing their notice to quit ends the tenancy for the other occupants.

15. In our support cases, we rarely see section 21s being issued to students, in part as they typically leave on or before the agreed date with no further action required. For this reason, we are not convinced by others’ arguments that there will be a mass exodus of student properties as tenants stay on.

16. Despite this, the threat of retaliatory eviction under section 21 is one of the deterrents to tenants pursuing action against landlords or letting agents who fail to make adequate repairs, alongside the lack of knowledge about their rights (see ¶31), the time consuming nature of making complaints (see ¶27) and lack of confidence in resolution.

Cost of Renting

 

17. Research has consistently highlighted the increasing and continued impact of the cost-of-living crisis on students, in particular due to the increasing affordability crisis in student housing and accommodation. In 2022, UoNSU found that 20-30% of students were facing or felt financial difficulties, with nearly 10% experiencing severe financial insecurity. (Black, R. (2023) "My grades from the last few years have gone down.")

18. More shockingly, in the last academic year UoNSU found that 61% of students faced moderate/ severe food insecurity within the last year, with 8% experiencing severe food insecurity, with rising bills and accommodation costs being highlighted as a primary cause. (Nichols, S. (2024) "Do I look alright? Does anything about this look alright to you? I'm not OK." )

19. Whilst the clauses regarding rent increases within this bill will not have a huge direct impact on student tenants who rarely stay beyond a year, we hope that constraints on the wider PRS will lead to less inflation in the ‘market rates’. All tenants should continue to enjoy protection against increases in the first year of tenancy.

20. It is worth highlighting that, while value continues to be a major driver of student choice in the PRS, students often end up paying more than comparable tenants, as each tenant can be charged nearly the rent that would otherwise apply to a whole household, and each year properties are consistently advertised and let at a higher rate than would be achievable within a contract.

21. Whilst outside the scope of the bill, it is important for the committee to appreciate that the student loan has not kept pace with the inflation in rents by some margin, rising by just 3.1% to 2021/22, whist CPI was at 7%, and by 2.3% to 2022/23, whist inflation was at 9.3%. This has also been highlighted by successive reports from the House of Lords Secondary Legislation Committee (12th Report of Session 2023–24 & 56th Report of Session 2022–23). 

22. Using figures collected by Unipol and published by Nottingham City Council annually, we estimate that local rents in HMOs have increased by over 44% since the 2020/21 academic year. (NCC Student Accommodation Update August 2024) 

23. The number of students receiving the maximum amount of support has declined in recent years, as the parental income threshold above which the maintenance loan is means tested (£25,000) has not been altered since 2008.

Rent Repayment Orders

 

24. Rent Repayment Orders are one of the few tools that actually provides restitution for tenants themselves. It is a tool we have supported student tenants with in the past, but can take time to go through, which can be a deterrent for student tenants who may not still be in the property by the time the process completes.

25. Whilst we support the expansion of RROs, we are concerned about how complex the regulatory environment is for tenants facing issues in their rental properties, with local authorities typically regulating through both Environmental Health and licensing (which must be separate due to the ring-fenced usage of license fees), the first-tier tribunal enforcing through RROs and with the new redress scheme due to be introduced as well.

Housing Ombudsman

 

26. The experience of student renters is almost universally one of putting up with, or in some cases ‘surviving’ poor quality properties, often in some state of disrepair.

27. The disadvantage of the typically annual cycle of tenancies most students experience is that there is little incentive for either the landlord to make repairs or improvements to the property other than their own good will, or for the tenant to pursue enforcement action which can often take months to even initiate, let alone secure improvements. 

28. This offers lessons for the rest of the PRS, as whilst the two-month notice period is a great benefit for private tenants, it provides a clear alternative to tenants to long complaints processes and runs the risk of tenants opting to leave rather than pursuing enforcement action against landlords and a continued drop in quality.

29. It is important, therefore, that the new housing ombudsman is able to resolve issues within two months of the issue being raised with the landlords or letting agent. The landlord should have replied to the initial issue within a week and actioned it within two weeks of the initial request being made. Once a complaint has been made to the ombudsman, it should aim to draw a conclusion within a fortnight and resolve the complaint where possible within a month.

30. Our experience of current housing redress schemes includes a case, which is not atypical, of resolution taking over four months from the date of contacting the scheme, not including the time waiting for the landlord/ letting agent to resolve the issue prior to the complaint being opened.

31. For many students this is also their first experience of rental accommodation, so they are unaware of where to look for help and, when searching for them, often find systems confusing and lengthy without significant support. 

32. In Nottingham, this support has significantly dwindled in recent years. Our understanding is that the local housing advice service is no longer being funded by the City Council.

33. Students’ Unions and universities have varied advice and guidance structures and capacities. Those SU’s that are able to offer advice services do not always have the capacity to offer housing advice, for example at present NTSU is unable to provide dedicated housing advice to it’s 37,000 students. Offering a simple process through a housing ombudsman will be a significant improvement in both offering a clear and effective resolution for tenants. This process should not be overly lengthy and should be able to work with local authorities to enable use of their enforcement mechanisms if required. It should also be able to provide financial restitution to tenants who have had to endure hardship, encouraging landlords to make repairs before a tenant complains.

34. In our experience supporting students, they often interact with or through letting or managing agents for a property. In some cases, disrepair is allowed to persist due to disputes between the agent and landlords, or delays in one contacting the other. With this in mind, we believe managing agents should be included in the housing ombudsman. 

35. It is also vital to the success of the ombudsman that landlords and managing agents cannot delay or get out of complaints to the ombudsman due to contractual terms which state complicated or long ‘internal’ procedures.

Landlord Database

 

36. From our perspective, both as the representatives of tenants and in UoNSU’s experience advising and advocating for tenants, a Landlord and Residential Property Database will be a necessary and useful tool for ensuring compliance for residential properties, providing it is kept adequately up to date.

37. It will be important for the database to work with local authorities to merge the local licensing requirements and databases with the singular dashboard, acting as a one-stop shop for landlords, letting agents and tenants.

38. This database should also require landlords to list any managing agent for the property, so the chain of responsibility is clear (and giving tenants the option to identify landlords and letting agents they prefer to avoid).

Decent Homes Standard

 

39. As mentioned above, student housing has persistent, and sometimes serious, quality issues. The rising costs of heating in recent years has led to a significant increase in the amount of mould and damp as well as generally cold in properties let to students.

40. In Nottingham this is, in part, due to the age of the rental stock on offer and particularly that occupied by students. It is a somewhat obvious to state, but these properties are now 20 years older than they were 20 years ago, in 2004. Short of significant construction of new properties or increase in standards in the PRS these issues will only get worse.

41. We look forward to seeing more details of the student homes standard, and hope that it, combined with the housing ombudsman, offer some clarity on the standards which can be expected and how to ensure they are provided.

Local Authority Enforcement Powers

 

42. Our understanding is that the government has committed to provide additional funding to cover any new expenses for local authorities created by this legislation, however, it is important to highlight that, in our experience, the local authority is not sufficiently resourced to routinely undertake enforcement action, except for in cases of failure to licence a property. This does not mean they are not working to improve quality in the PRS, but that using the enforcement tools takes valuable time resource away from inspecting a wider number of properties which can be improved through direct discussion with the landlords.

Additional Considerations

 

43. Many landlords will require tenants to offer someone to act as a guarantor for the rent in case the tenant fails to pay. These guarantors will typically need to meet an income check and be based in the UK. For international students, estranged students and those from lower income backgrounds, this can be a difficult bar to meet, effectively excluding them from a significant sector of the market.

44. There are a few private schemes (and one university run scheme to our knowledge) which, for a fee, act as a guarantor on a student’s behalf, however, these are not universally accepted by landlords, and place additional cost on some of the most disadvantaged tenants in the PRS.

45. We believe that, in order to prevent unfair discrimination in the sector which reduces social mobility and acts as a barrier to accessing university, landlords should not be able to refuse such schemes acting as a guarantor, and that the committee should consider further measures to ensure no one is unfairly disadvantaged.

46. We are also concerned about the discriminatory impact that any requirement to have a guarantor has on students seeking to access higher education, however, we recognise its value in offering reassurance for landlords to let to student tenants who are unlikely to meet standard affordability criteria, particularly given the sub-inflationary increases in maintenance loan in recent years, and freeze in parental income means testing thresholds since 2008 (see also ¶21).

47. There is currently an alternative workaround, used mainly by international students, to pay a period or all of the rent in advance. Some students also pay periods in advance as student finance is released in three instalments. However, this is not universally helpful for students, with many others, particularly given the real-terms decline in the maintenance grant in recent years (¶22), preferring monthly rental payments which they can meet with part-time work. Considering this, we would ask the committee whether tenants should be able to offer advance rent to budget or allay affordability concerns, whilst maintaining the ban on advance rent being routinely sought,

48. In order to prevent students from being treated as a second class of renters, we would like the committee to consider including a ban on advertising ‘no-student’ properties.

49. As mentioned above (¶34) our students will often live in properties managed by a letting agent on behalf of a landlord, and the amount of direct contact they have with the landlord can vary based on the circumstances. There are currently no professional standards which apply to letting agents, and the existing redress schemes are slow and ineffective. We see consider it a substantial oversight for them not to be covered in legislation designed to improve renters' rights, particularly in provisions related to housing maintenance.

50. There is further ground to be covered in introducing a professional standard for letting agents, enabling individuals and companies from being barred from managing properties if they fail to meet tenants needs or continuously fail to act in a responsible manner on landlords’ behalf.

51. The bill as it currently stands does not give details of the extent to which Purpose-Built Student Accommodation will be excepted, which the government has indicated it will do through delegated powers for properties covered by one of the approved codes of practice. Whilst we understand the reasons for the exception to changes to tenancies, we believe much of the rest of the bill, in particular regarding the expected standards, enforcement, ombudsman and database are not only applicable but also important to the PBSA sector.

52. As they currently operate, the accreditation schemes for PBSA are not truly effective at protecting tenants in PBSA, who still face substantial issues of safety, poor maintenance and unfair treatment. The codes need to be strengthened to plug the gap and ensure tenants are guaranteed the same or equivalent standards enjoyed by the rest of the PRS.

53. Furthermore, there are substantial new rights for tenants in the PRS which should also be available for tenants in PBSA, and the accommodation codes would require substantial changes in order to accommodate. For example, there is no opportunity for compensation for poor housing standards and management, nor do the schemes fulfil the role of tenancy deposit and protection schemes.

October 2024