Renters’ Rights Bill

Debate between Lord Shipley and Lord Best

Tuesday 22nd April 2025 Lords Chamber

[Lord Shipley (LD)]

My Lords, along with the noble Lord, Lord Willetts, and the noble Baronesses, Lady Wolf and Lady Warwick, I have signed this amendment. I spoke about this issue at Second Reading.

The noble Lord, Lord Willetts, reminded us that there are three totally different rental regimes for students: purpose-built accommodation, including large blocks; the HMOs, which are larger properties in the private rented sector; and the smaller private rented sector accommodation. The noble Lord was absolutely right to say that the achievement of so many young people in going to university has been dependent on the availability of accommodation in the private rented sector. From my time in Newcastle upon Tyne, I know how fundamentally important the PRS was to the growth of the universities in the city. I think the Government accept that a special arrangement is needed for an academic-year contract, but that has to include those in one-bedroom or two-bedroom properties; they also need to be exempted as part of ground 4A, which currently restricts the exemption to houses in multiple occupation.

The Government have Amendment 202 in this group, and I am keen to hear what the Minister will say about that and to what extent she feels it will help us solve the problem. There is a danger that unscrupulous landlords will define properties as being for students when they are not, in order to bypass the impact of this Bill when enacted. I thought a lot about that and believe that the Government can mitigate that possibility. It might be done through the register; there may be ways of delivering a solution by that means. It occurred to me that it may be possible to use non-liability for paying council tax as the basis for a system for identifying those who would qualify for Ground 4A. It would require local authority co-operation and proactive management of the private rented sector, but it can be done—and it needs to be done because students are very important to the lifeblood of many cities and towns across the country. Having a vibrant private rented sector for them to use matters.

If the Government decide that the smaller private rented sector properties do not need additional help, the likelihood, given that students would be able to give two months’ notice under the revised terms of this Bill, is that landlords will decide to stop letting properties in the private rented sector to students, or to reduce their exposure to the student-letting market.

It is a complex area. I recall the Minister saying when she summed up at Second Reading that there are difficulties and issues that have to be considered. I hope that, once she has replied and we better understand the intention of Amendment 202, we can produce something much better when the Bill is on Report.

[Lord Best (CB)]

My Lords, I rise to move Amendment 266 in my name and that of the noble Lord, Lord Shipley. This is my first intervention in Committee, so I declare my interests: my wife owns privately rented property; I am a vice-president of the Local Government Association and of the Chartered Trading Standards Institute; I am currently chairing an inquiry into intergenerational housing, and I am on Business in the Community’s Blackpool housing advisory board.

My Amendment 266 in this group concerns student housing, but it is on a slightly different tack. While there are strong grounds against a general option of fixed-term tenancies, separate arrangements are justified for student accommodation, as indeed the Government acknowledge. My amendment is a modest tweak to the change already made by the Government to exclude student housing, except in smaller accommodation, from the prohibition on fixed-term tenancies. It would address a rather different issue. It would exempt certain purpose-built student accommodation from the private rented sector licensing schemes of local authorities, which enable councils to inspect and enforce standards for private rented property. This exemption for PBSA accommodation is justified because these schemes are already subject to high levels of scrutiny and compliance through government-approved codes of management. I am grateful to the British Property Federation for bringing this issue to my attention.

As the noble Lord, Lord Willetts, and many others have eloquently explained, purpose-built student accommodation is an important part of the rented market. It provides 724,000 beds throughout the UK, split between university owned and privately owned. There are nearly 200,000 more beds, mostly privately provided, in the pipeline. Without this sector, students would have to rely on, and would put more pressure on, the wider private rented sector, where satisfaction levels are rather lower. Lack of suitable accommodation is a major problem for students and for universities. Removing barriers to tackling the undersupply of student housing is also important in easing the strains on the rest of the private rented sector.

Local authority licensing can definitely help raise standards for the PRS, but its value does not extend to that part of the PBSA sector, which is already heavily regulated. The sector has government-recognised codes of practice under which members are inspected on a regular rolling programme, which covers the property’s condition, management and regulatory requirements. Because of the level of scrutiny required by these codes, a 2019 government-commissioned independent review found that licensing was not required for purpose-built student accommodation. It said:

“This accommodation, as a normal condition of operation mandated by the attached University, is required to implement a strict, Government recognised code of management practice … Such a code holds the accommodation to much higher standards of management and condition than any licence conditions could reasonably achieve. Properties are rigorously inspected on a regular basis (typically three times per year)”.


This MHCLG review concluded:

“Given that these properties are already highly regulated, and equivalent properties managed by Universities (to an almost identical code of practice) are exempt from licensing, licensing of such properties is manifestly redundant and extremely expensive for the operators”.


In relation to the expense for operators, local authorities can operate a licensing scheme charge on average of £700 per license, but they can charge up to £1,200, and since these fees are often charged per unit, not per scheme, not per building, a scheme of several hundred units—for example, studio flats—can incur costs in excess of hundreds of thousands of pounds. While some local authorities already offer exemptions or discounts for PBSA providers that adopt these codes of practice, this is not standard practice, and many local authorities do not offer any reduction in licensing charges. This is not really fair. PBSA was never a target for the licensing scheme, and the cost and time incurred by the licensing process does not add any benefit for students. Exemption from licensing would remove an unnecessary expense for providers, saving some of them hundreds of thousands of pounds and improving the viability of PBSA schemes.