Understanding the Whitepaper
Before diving into its implications, let's briefly understand what the whitepaper entails. Released by educational policymakers and industry experts, the whitepaper addresses various aspects of student accommodation, aiming to improve standards, enhance affordability, and create a fairer rental market for both landlords and students. It focuses on key areas such as safety, affordability, and student welfare.
Safety and Compliance
One of the primary areas addressed in the whitepaper is the safety and compliance standards for student accommodation. Landlords will be required to meet stricter safety regulations, ensuring that properties are equipped with adequate fire safety measures, secure entry systems, and appropriate maintenance protocols. While this may require additional investments from landlords, it ultimately benefits both students and landlords by creating safer living environments and reducing potential liabilities.
Affordability and Rent Control
Another significant aspect of the whitepaper is the emphasis on addressing affordability concerns for students. Rent control measures may be introduced to prevent excessive rent hikes, ensuring that students are not burdened with unaffordable housing costs. Landlords may face limitations on rental increases, which could impact their potential profit margins. However, this move aims to strike a balance, ensuring students can access affordable housing without compromising landlords' viability.
Student Welfare and Support
The whitepaper recognizes the importance of student welfare and support within the rental sector. It encourages landlords to provide enhanced support services for students, such as mental health resources, guidance on tenancy agreements, and mediation services. By focusing on student well-being, landlords can foster a positive and supportive living environment, attracting more tenants and building a reputable brand in the market.
Whilst all of these appear honourable pursuits will the white paper proposals really achieve these goals? I doubt it! There are always unintended consequences. The biggest is that if private Landlords are discouraged there will be a rental housing crisis with reduced supply of property. This would have a negative impact on all their desired goals. The Governments hope is that institutes will step into the breach. With the likes of Lloyds banking group announcing their intention to become the largest property owner in the UK.
Having worked for the Lloyds banking Group this is laughable to me. Are memories so short that we forget what these institutions did to us in 2008. What on earth makes the Government think that these institutions are some how more reliable than private landlords. I for one would not put safety & compliance, affordability and Rent controls and welfare & support into their hands.
The major concerns for Student landlords seem to centre around the removal of fixed term contracts that coincide with the academic year. What happens if the tenants decide not to leave? Quite often student properties are relet to the new incoming tenants prior to the previous tenants leaving. So, if the previous tenants don’t leave and the landlord has contractually committed to housing next years students then they will be obliged to find alternative housing. What most commentators seem to have missed is that this issue has always existed. While the fixed contract provides everyone with the clear dates for when the tenancy ends it doesn’t provide guarantees. If a tenant remains after any agreed period, there can still be an issue over removing them in a timely fashion. The solution now and in the future is in how the tenancy is set up in the beginning and the use of “joint and several liability”. If one tenant stays it is deemed that all tenants have stayed and as such are liable for the rent.
I suspect the issue will be that void periods in the summer will extend as landlords will be unable to enforce the contract into the summer months. But ultimately landlords will price this into the rents achieved.
This example beautifully illustrates the advantage of a private landlord over institutional landlords. We can adapt instantly to any legislation or other changes. Whilst I except my bias and my positive disposition those landlords that can adapt quickest will find a way to thrive in what ever the white paper brings. And, bizarrely enough the less landlords that stick it out the greater the opportunity for those that do.