Confusion is brewing among legal experts over the government’s guidance regarding the exemption of Purpose-Built Student Accommodation (PBSA) from key reforms in the Renters’ Rights Bill. The bill, which will scrap Section 21 notices and overhaul assured shorthold tenancies (ASTs), leaves questions unanswered about the exact status of PBSA tenancies, sparking debate within the property sector.
Uncertainty over PBSA tenancies and Section 21 changes
The Renters’ Rights Bill is set to make significant changes to the private rental sector, but guidance from the government suggests PBSA could be exempt. The explanatory notes state, “Purpose-Built Student Accommodation will be exempt from these changes as long as the provider is registered for government-approved codes,” as these tenancies are not classified as assured. However, legal experts are raising concerns about the lack of clarity surrounding the exemptions.
Robin Stewart, joint manager of private sector residential landlord and tenant at Anthony Gold, is among those puzzled by the guidance. “Contrary to what the explanatory notes seem to suggest, nothing in the Bill creates an exemption for PBSA tenancies,” says Stewart. While there is “some special treatment for student accommodation in the amendments to the ‘grounds for possession,’” he stresses that this does not exempt PBSA from the wider reforms.
Stewart speculates that the confusion may be a drafting error, but if the government intends to exempt some PBSA providers from granting assured tenancies, it would need to amend the ‘Lettings to Students’ regulations. This could involve identifying certain PBSA providers for exemption or creating a new category of landlords eligible for the exclusion.
Growing PBSA sector adds pressure for reform
The PBSA sector is rapidly expanding, and with this growth, there are increasing calls for consistency in tenancy rights for all students. Knight Frank’s annual Student Accommodation Survey projects that by the end of the decade, PBSA will house 69% of second- and third-year students, many of whom expect more amenities in their accommodation.
As PBSA becomes the preferred choice for a large portion of the student population, industry experts argue that students should have equal tenancy rights, regardless of whether they are in PBSA or private rented housing. The concern is that without equal treatment, a dual market may emerge, with some students facing fewer protections under different tenancy agreements.
The road ahead for landlords
While the government may address the issue during the Bill’s progression through Parliament, Stewart advises landlords to start preparing for the upcoming changes. The abolishment of Section 21 and the move to scrap ASTs will significantly alter the rental landscape.
For landlords, especially those involved in student lettings, it is crucial to stay informed about the Bill’s final provisions. Failure to do so could result in compliance issues, particularly if certain PBSA providers are eventually granted exemptions while others are not.
The ongoing confusion has left landlords, PBSA providers, and legal professionals calling for the government to clarify the details of the Bill. As the student accommodation market evolves, the need for fair and consistent tenancy rights becomes more pressing. How the government handles this matter could set a crucial precedent for the future of student housing in the UK.
As we await further developments, the implications of the Renters’ Rights Bill continue to ripple across the sector, with landlords, students, and investors all keeping a close watch on the outcome.
