Periodic Tenancies - new data shows threat to private renting

HMOs rented by students can be up to £30 a week cheaper than purpose built student accommodation in halls of residence.

That’s the finding by the student-focussed search engine Accommodation for Students, which says the danger for students is that HMOs may be reduced in number by the provisions of the Renters Reform Bill. 

The platform says that currently the market offers students a good range of accommodation options, including purpose built flats provided by universities and the private sector, or shared housing options in HMOs provided by student landlords. 

“Both are vital in providing choice and affordable accommodation options” it says.

UK students account for 77 per cent of enquiries on HMOs, but only 60 per cent on purpose built accommodation. International students are more likely to enquire on purpose built properties, accounting for 40 per cent of enquiries.

However, plans to ban fixed-term tenancies as part The Renters Reform Bill - and instead transition all tenancies to one system of periodic tenancies - would mean students would not have to leave their HMO accommodation at the end of their fixed-term, usually the end of the academic year.  

This would in turn mean private landlords would be unable to guarantee spaces to new students at the start of the next academic year, and could result in student landlords exiting the market, subsequently reducing the mix of accommodation options for students.

Accommodation for Students says it has already seen the impact following a similar change in law in Scotland, with students struggling to find suitable accommodation. 

Edinburgh ranks in the top 10 most expensive cities for both HMO and PBSA at £156.34 and £193.47 per week respectively. According to the search engine, HMOs are currently marketed at an average of £22 per week less than purpose built accommodation, and where a student chooses to manage their own bills, this difference increases to £30.15 per week. 

The average price of an HMO is currently £122 per week, or £113.85 without bills. The average price of a purpose built alternative is £144 per week.

Following post-pandemic grade inflation, which resulted in a higher intake of students at some of the most sought-after universities, some cities are already experiencing an undersupply of affordable accommodation. For example, in Bristol, the average price difference between HMO and purpose built is £76 per week, in York this is £43.53 and in Edinburgh the difference is £37 per week.

The search engine’s director, Simon Thompson, says: “It is, in my view, vital that the government exempts private student landlords from its proposal to move all tenancies to periodic ones, as it has for institutional landlords who run Purpose Built Student Accommodation (PBSA). 

“Failing to do so will force private landlords out of the market, reducing the mix of affordable options and driving up rents for student who are already on a limited budget. Furthermore, where demand exceeds supply, students will be forced to look for accommodation further away from their university town or campus, meaning transport then becomes an additional cost and problem for students.

“Student accommodation and its location forms a fundamental part of university life. Many are already facing higher costs owing to rising utility bills.  If students cannot find or afford accommodation, those on limited budgets are more likely to feel ostracised.”

Currently the most expensive city for student accommodation is London, averaging £253.17 per week for HMO accommodation, followed by Cambridge and Bath, which are £191.74 and £191.39 respectively.  The cheapest city is Wolverhampton at £68.75, followed by Bolton £70.45 and Stoke 77.41.

London is also the most expensive for PBSA at £258.11 per week, followed by Bristol £243.04 and Bath £232.80. The cheapest cities for PBSA are Hartlepool at £69 per week, Bradford at £70.82 and Hull at £75 per week.