Student HMOs
The impact of the Renters (Reform) Bill on student HMO properties
Most student houses qualify as HMOs as they are usually home to three or more unrelated people who are sharing facilities.
However, one of the big differences between student lets and other HMO properties, is that students will often go into a house share as a group, all moving in and out at the same time.
As such, it’s common for landlords to have students all sign one joint tenancy agreement for the whole property (although rent may still be calculated on a ‘per room’ basis).
This means each of them is jointly and severally liable for the rent, bills and damage – i.e. if one of them leaves or fails to pay their share of the rent, the rest have to cover it.
And because the academic year only runs for around nine months, landlords generally ask students to sign a 12-month tenancy agreement, so that they’re not left with a vacant property over the summer holidays.
In contrast, tenants in other types of HMO may have no fixed minimum period.
This student HMO market is generally a reliable source of income offering some of the best rental yields for many UK landlords. To find out more, read our ‘Ultimate landlord guide to student properties’.
One of the key concerns about the proposal to end fixed-term ASTs and abolish section 21 is the impact those changes would have on the student HMO market.
If landlords were unable to get students to commit to a 12-month tenancy, they could leave at the end of the summer term, risking landlords having a completely vacant property until the start of the following academic year.
Without the ability to issue a section 21, landlords wouldn’t be able to let to a short-term tenant for just those few months over the summer, and a three-month void would make the investment unviable.
Clearly, these aspects of the Bill need rethinking, and will undoubtedly be addressed as it is debated in Parliament.
For more information on the Renters (Reform) Bill, see our dedicated guide.
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