Renters’ Rights Bill

Lord Willetts Excerpts

Tuesday 22nd April 2025 Lords Chamber

At the heart of these amendments is the future and interests of our children and grandchildren. Like all of us once did, students are stepping into adulthood, navigating new freedoms, new responsibilities and new challenges. Their need for secure, affordable and predictable housing is a foundation for their success. Let us give them the stability to study and the security to maximise their potential. I beg to move.

[Lord Willetts (Con)]

My Lords, I shall speak to Amendment 40 in my name. This is the moment when students and higher education enter the housing and rental market debate. I am never totally sure whether the department responsible for housing welcomes this interruption from the higher education sector, but I hope the Minister will accept it in the spirit in which it is meant. I declare an interest as a visiting professor at King’s College London, and a member of the council of the University of Southampton.

I understand the arguments that the Minister makes about the need for tenants to have security and be able to put down roots in the long term, but so many of her arguments for this legislation do not apply to students who are seeking reliable accommodation for an academic year. The model that she proposes is clearly not in their interests.

If I may say so to the Minister, the link between housing policies and higher education is very important. The previous Labour Prime Minister, Tony Blair, set a target of 50% of people going to university. There are different views about the target; I do not personally believe in targets, but nevertheless that 50% target was achieved and it was achieved only because of the use of the private rented sector. It is impossible to have imagined that that target would have been secured without the way in which the private rented sector has developed for student accommodation. This is not just a historic achievement; if the Government have opportunity as one of their core objectives, it is surely important that students who could benefit from higher education have that opportunity, and that includes being able to access accommodation that meets their needs.

The Government have clearly accepted that there is a need for some special arrangements for student lets. The exact form they take is open for discussion. My noble friend Lady Scott made very powerful points in support of her proposed amendments, which try to secure that. The Government have made some concessions to recognise the student market. There is already one exemption from the legislation, which is for purpose-built student accommodation. That tends to be high-cost and involves students making a very early commitment. It is possible almost at the beginning of the previous academic year for the student to enter into a special academic year contract in this high-cost, purpose-built accommodation. To put it crudely, the Government are looking after the elite: the students who plan a year ahead, can afford the high rents and go into the —by and large—very high-quality purpose-built accommodation, which often has business investors behind it.

There is now a second category that has been added, and that is ground 4A, which is essentially for HMOs with three bedrooms or more in the private rented sector. They are also now going to be exempt from the burden of the legislation, with a different start date for making a commitment—about January before the academic year starts. That is the next group— I feel it is a bit like that famous “three classes” sketch, since we have got a second group that will now be looked after.

But that leaves a third group for whom the Government are not currently providing any exemption. These are students in smaller accommodation, maybe one or two-bedroom properties, for whom none of the special exemptions are going to apply. It is therefore very odd that, in the Government’s model to tackle this problem, you could have three university students who are friends and are in three totally different rental regimes because of the structure of the exemptions which the Government are trying to offer.

What I am attempting in the amendment in my name—I welcome the support of other noble Lords—is to say that these smaller rented accommodations of one or two bedrooms should also be exempt from the general provisions of the Bill and instead be recognised as academic accommodation, with its special needs. What do we know about these students in one- or two-bedroom properties? The evidence is limited. There seem to be quite a few of them. There are different estimates as to how many students in the rented sector are in these smaller accommodations. One estimate is 24%; another is a third. Several hundred thousand students are currently in this sector. So, if landlords pull out from it because there is no way they can be confident of being able to offer a tenancy for an academic year and the accommodation enters the mainstream market, several hundred thousand students currently renting in this sector will lose out.

One view is that they may be students who go for particularly low rents. I do not know. An alternative account of these students is that this smaller accommodation is basically for students who wish to live more quietly. It is less social. One suggestion is that it tends to be final-year students who move out from the bigger, more crowded accommodation so that they can properly study and revise for their final year. The Government’s education policy appears to be, “It is okay to have a special arrangement if you are going to be in a large, sociable environment, but if you want to move into a studious, quieter environment, we are ceasing to recognise that you are a special student and your kind of accommodation is going to go”.

I very much hope that the Minister will recognise, as the Government have already made concessions, that we need a wholehearted attempt to preserve an academic year student rental market. My attempt to extend the exemption on ground 4A to one- and two-bedroom accommodation is an attempt to do that. The interesting proposals from my noble friend Lady Scott are an ingenious attempt to do that.

Finally, and briefly, I will refer to another amendment that attempts to do that: Amendment 189, in the name of my noble friend Lord Young of Cookham, who is in the Chamber but currently appears unable to participate in this consideration of his excellent amendment. It is another attempt to resolve this issue with an ingenious proposal that there should be a special code of conduct for private sector residential landlords letting to students. If landlords sign up to that code of conduct, they would then be exempt.

To be honest with the Minister, I do not have particularly strong views about exactly which mechanism should be used but I hope that at the end of the consideration of these amendments, she will accept that there needs to be a wholehearted recognition that the student academic market is different and, instead of slicing it into these particular sectors—some parts of it to be recognised and others not to be—there needs to be a complete solution for students renting for academic terms because, otherwise, the Government’s commitment to opportunity will be in jeopardy.

[Baroness Wolf of Dulwich (CB)]

I have added my name to Amendment 40 in the name of the noble Lord, Lord Willetts, and declare an interest as an academic employee of King’s College London. As such, I am acutely aware of the accommodation and living costs that students face if they study away from home. London is particularly expensive, as I am sure noble Lords have noticed, and the level of maintenance loans available and the total absence in England of maintenance grants mean that many UK students conclude that a London degree is simply out of reach.

At King’s, we manage to offer first-year undergraduates a place in hall and we have an affordable accommodation scheme that helps a subset of students obtain accommodation at below market rates, and other universities are similar. However, over time we have seen our student body change. On the one hand, we have far more international students, many of whom are able to afford the rents charged in high-end, purpose-built student accommodation or to pay market rents in the private sector; on the other hand—this is far less well known—we have seen a strong growth in the proportion of our UK students whose families live in or close to London who live at home, and a corresponding decline in the number of UK students who are in student accommodation in London.

If your family lives in the London area, you can live at home and be a commuter student and still have access to a huge range of institutions and degrees, but that is not true for people in a very large part of the country. You do not need to believe that young undergraduates should all go away to do their studies to be aware that for many people, it is absolutely central to social mobility and to their future. If it is only wealthy students who can move geographically, our best faculties and specialist degrees will not be able to recruit the best students.

Renters’ Rights Bill

Lord Willetts Excerpts

Tuesday 4th February 2025 Lords Chamber

[Lord Willetts (Con)]

My Lords, I congratulate the noble Lord, Lord Wilson of Sedgefield, on his excellent maiden speech, its eloquence and his extraordinary personal story. This afternoon, behind the Bench of Bishops, we may have seen another constitutional function emerge in this House: the Bench of Blairites. I welcome the noble Lord and appreciate what he said about his predecessor as Member of Parliament. He also spoke eloquently about opportunity, and that is a test against which the measures in the Bill should be assessed.

I thank the Minister for her willingness to engage in discussions with all of us across the House. In her opening speech, she referred to genuine problems with the private rented sector, the difficulties for people in employment if they lose their accommodation and the incredible difficulties for parents with a child at school if they face the uncertainty of losing the place where they live. She ended by saying that she hoped this legislation would help tenants put down deeper roots in the community.

That was all very eloquent, but it revealed a way of thinking that simply does not reflect the reality of student accommodation, for which these concerns do not apply. There are over 1 million students in the private rented sector and a long-standing problem, preceding this Government, is that, although access to private rented accommodation has been crucial to the growth of higher education in this country, the housing department has never really understood higher education and the education department has never understood the importance of private housing. I fear that this legislation is an example of that phenomenon.

For example, students receive maintenance loans in three separate payments during the year. Many rents historically have been structured around the payment of maintenance loans. There is now an assumption of a monthly rental payment model and no scope for landlords to offer tenancies structured around maintenance loans. Have there been any conversations with the education department about changing arrangements for the payment of maintenance loans so that they match the envisaged new payments of rents? Those are the kinds of practical issues that matter and are acute if there is no understanding of the problems facing students.

Students have genuine grievances. At the All-Party Group for Students last week, all of us from both Houses were left in no doubt about their unhappiness, which was sometimes about the quality of student accommodation and sometimes about the role of guarantors, for example. But few believe that the Government’s proposals, as they stand, will make these problems significantly better. Indeed, there is a danger of landlords exiting the system.

The Government have already made some welcome concessions. First, there is the exemption for purpose-built student accommodation. This is estimated to cover about half a million students out of the 1.2 million in private rented accommodation. It is the most expensive and is heavily regulated—quite rightly. There are significant constraints on its supply and on its further provision.

We have recently had the famous ground 4A exemption, which means that landlords can repossess a rented property in advance of the new academic year. This applies to landlords of HMOs with three or more bedrooms. As the noble Baroness, Lady Warwick, said, this does not cover the many smaller landlords of smaller student accommodation with one or two bedrooms.

It is estimated that, of the 1.2 million students in the private rented sector, half a million or so are in purpose-built accommodation. There may be another 300,000 or 400,000 in the larger HMOs, and there could well be 200,000 to 300,000 in the smaller private landlord arrangements for which there is currently no special recognition. Will the Minister consider, for example, extending this exemption beyond large HMOs to all private landlords?

More radically, will the Minister consider the case for continuing to allow 12-month academic year tenancies —a system which has worked well overall? Does she recognise that there are other risks with some of the provisions in the Bill? For example, upfront payments may now be much harder to require. However, there will be the increased use of guarantors. Requiring a guarantor for a student from a low-income background is very tough, as is requiring a UK guarantor for an overseas student.

Perhaps the housing department is fed up with special pleading on behalf of students, but I think the crucial criterion is one of opportunity, as we heard in that excellent maiden speech. In the purpose-built accommodation—PBA—the rents for students average about £190 a week, in contrast with about £130 a week charged by small private landlords. We could end up with a system where the more expensive accommodation sector grows and is exempt. By and large, this is more expensive and occupied by the affluent students. In future, low-income students might find it harder to access the diminishing amount of lower-rent accommodation. Maybe they are supposed to stay at home and become commuter students. Some people want to see that. A very good social rule of thumb is that the more affluent someone’s family and the higher their social class, the greater the distance they go away to university. The low-income students will be staying at home and commuting, while the students from affluent backgrounds will pay high rents in high-quality, purpose-built accommodation a long way from home. If we end up with this, it will not be meeting the opportunity challenge. I very much hope the Minister will accept that her proposals need to be assessed as to whether or not they promote educational opportunity in our country.