Renters’ Rights Bill: The abolition of the fixed term tenancy and its impact on PBSAs

The Renters’ Rights Bill (“the Bill”) abolishes fixed term assured shorthold tenancies and prevents landlords from terminating tenancies on a “no-fault” basis. This presents a particular problem for PBSA operators who need to take back possession of their properties at the end of the academic year. 

Despite the Government’s suggestion in the explanatory notes that PBSA providers will be exempt if the provider is registered for a Government-approved code, these provisions do not yet appear in the Bill and any PBSA providers with properties which are not HMOs will find no suitable grounds of possession to rely on unless the tenant in breach of the tenancy. 

Where a relevant property is an HMO, a new ground for possession has been added to the Bill to allow a landlord to recover possession of a property let to full-time students at the end of the academic year so that it could be relet to students for the next academic year. There is an additional hurdle for the operation of this new ground which requires landlords to give tenants written notice, within one month of the commencement date of the Bill, of the landlord’s wish to be able to recover possession on the basis that the tenant meets the student test and the landlord intends to let to students. It will be important that this step is not missed given the short period within which notice will need to be given after the commencement date. 

Another issue is that with the removal of fixed term ASTs, a student tenant under the Bill is technically able to serve two months’ notice to vacate at any point during the academic year. This is a considerable potential problem due to the cyclical nature of the academic year and providers may be unable to find new students to occupy the property until the beginning of the next academic year resulting in void periods. 

Tenancies granted by a specified educational institution to students are already excluded from being ASTs and so the Bill will not affect those tenancies.

However, PBSA properties are often owned privately with developers and landowners entering into arrangements with the local planning authority, universities and other educational institutions to provide units of student accommodation and affordable student accommodation to students. Those private developers and landlords will be heavily affected by the Bill because they may currently routinely serve no-fault notices to obtain possession at the end of the academic year. The Bill does not allow landlords to obtain possession unless there is a breach of the tenancy or the tenant has caused nuisance or committed a criminal offence. This may be of concern to those providers who may wish to make this known to the Government via industry bodies.

The second reading of the Bill will take place in the House of Commons on 9 October 2024. Those in the PBSA sector will want to keep an eye on developments as the Bill progresses through Parliament as options are needed so that PBSA providers can seek possession from students at the end of each academic year under the new regime.

We are tracking developments on our Essential Residential Hub and our timeline: Evolution of the private rented sector. This insight has been prepared as a general guide only and does not constitute advice on any specific circumstances. Please seek advice on your specific circumstances.

Please do not hesitate to contact Laura Bushaway, Lauren Fraser or your usual Charles Russell Speechlys contact if you have any queries.