Baroness Scott of Bybrook:

Moved by Baroness Scott of Bybrook

7: Clause 1, page 1, line 13, at end insert “unless the tenant meets the student test when the tenancy is entered into.(1A) For the purposes of this section, a tenant who meets the student test when a tenancy is entered into has the same meaning as in Ground 4A.”Member’s explanatory statementThis amendment would allow student tenancies to remain as fixed tenancies to provide the certainty that both student tenants and student landlords require.

My Lords, I shall speak also to Amendments 44, 45 and 46 in my name.

Although it may have been some years ago, and not all Members of your Lordships’ House chose to go to university, many noble Lords will no doubt recall their own experiences as university students. For those whose memories may have begun to fade, it is likely that a son, daughter or even grandchild is at university today or has recently been at university. I raise this point because those of us who fall into this group will recognise that students have distinct and unique housing needs that set them apart from all other groups. Most students rely on a combination of maintenance loans, part-time jobs and, increasingly, the support of the bank of mum and dad—or even granny—to meet their costs during their studies. Proximity to campus is essential both for academic engagement and to reduce the burden on transport costs. Students typically require leases of nine to 12 months, aligned to the academic calendar. I stress flexibility as an increasing number of tertiary education providers are now offering 18-month courses, moving away from the traditional three-year model. For many students, this marks their first experience of independent living. They are often unfamiliar with housing laws and lack the knowledge that only life experience can bring.

Although the exact legal framework for the exemption requires further clarification, the Government, by virtue of attempting to exclude purpose-built student accommodation from the ban on fixed-term tenancies, have accepted the unique position of students, and we welcome that. However, we feel there is more work to be done.

The Explanatory Notes assume that purpose-built accommodation tenancies are not assured. StudentRent puts this drafting down to a confusion with university halls, which use non-exclusive licences. In reality, most PBSA providers issue exclusive assured shorthold tenancies, meaning that, unless the Bill is amended or exemptions are extended, the agreements will become invalid once the new law takes effect. Could the Minister please use Committee to clarify this? If we cannot reach a reasonable position in Committee, we will have to return to the issue on Report.

In their drafting of the Bill, the Government have missed the opportunity to exempt all types of accommodation. As noble Lords will know, it is common that, after the first year, students often move out of purpose-built student accommodation and into HMOs or other types of property in the private rented sector. Amendment 7 in my name would ensure that student tenants could keep their desirable fixed-term tenancies, no matter what type of accommodation they find themselves in. We must not allow a two-tier system to emerge, where only those who can afford the most expensive purpose-built accommodation are granted the stability of fixed-term tenancies; that would be a perverse outcome from this legislation. It is vital that we resolve this as soon as possible.

Fixed-term contracts provide students with clear start and end dates that not only make financial planning more straightforward but ease the burden of day-to-day administration tasks that can be particularly challenging for those experiencing independent living for the first time, all while managing the demands of their academic studies. Perhaps most importantly, fixed-term agreements provide rent certainty for the entire duration of the contract. That certainty is not only reassuring for students but essential for their families, who rely on clear and predictable costs in order to budget effectively and support their children through higher education. Furthermore, knowing precisely when a tenancy will end helps students avoid disruptive mid-semester moves, which can have a detrimental impact on their studies and exam preparation.

While stability is vital, so too is flexibility. It is on this point that I wish to speak to Amendments 44 and 45. The current provisions acknowledge in part the need for student landlords to regain possession by the end of the academic year, under ground 4A. However, this fails to take into account those students whose studies do not follow a traditional academic calendar. It is important to stress that, under the current model, it is exceptionally rare for student landlords to need to resort to eviction proceedings. In practice, the challenge is far more likely to arise when students wish to leave their tenancies early. The proposals as they stand do not fully address the consequences of such scenarios.

Consider this: under a joint and several liability tenancy, the early departure of one student results in the termination of the tenancy for all. Unless the remaining tenants can successfully renegotiate their terms, this leaves them exposed to uncertainty and potential financial strain through no fault of their own. Alternatively, where individual room agreements are in place, the remaining tenants may be shielded from immediate financial impact, but they are given no say over who might occupy the now vacant room. This can severely disrupt the dynamics and cohesion of a household, undermining the very stability we should be seeking to protect, especially as students are preparing for exams which so often determine their future careers.

Has the Minister fully considered these drawbacks? Might this not be the moment to explore the creation of a new fit-for-purpose short-term student tenancy—one that balances the need for certainty, the reality of flexibility and the importance of maintaining the supportive and stable environments that students so often rely upon? Have the Government considered the calls from the student sector to create a new fit-for-purpose shorthold student tenancy and, if so, to what extent does this balance the need for certainty that students rely upon?

While there is a provision for student landlords to regain possession from bona fide students at the end of the academic year using ground 4A, Amendment 41 in my name seeks to probe why this right is conditional on a written statement being issued before the tenancy begins. Will the Minister clarify the purpose of this requirement? Surely, the right to recover a property should depend not on whether a letter was written but rather on the nature of the tenancy itself.

Finally, Amendment 46 in my name probes the Government’s definition of student and why they have chosen to exclude apprenticeships, for instance. Similarly to university students, a fixed-term tenancy could be set to match the duration of an apprenticeship and provide stability for the full length of their training. What is more, should it not be considered only fair that landlords have access to the same means of possession for apprentices as they do for university students? This amendment seeks to probe why those on an alternative education plan will be excluded from a definition that could bring them significant benefits through exemptions to specific restrictions.

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.

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.

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.

I have belaboured these points because they mean that private rented accommodation that is affordable for students and in ready supply is incredibly important to the future of this country and of our young people. It is absolutely central to enabling their movement and to their future prospects. There is no way that universities can provide cheap accommodation for all or the majority of their students throughout their degrees. As the noble Lord, Lord Willetts, has already pointed out, the growth and availability of privately rented student accommodation in university towns and cities has been central to the growth of higher education in this country. This is due partly to the rise of international students, of course, but, above all, to the huge increase in home student enrolments in the past decades.

Fortunately, in most of the country, and in the cities and towns which house most of our universities, market rates are far lower than in London—people can still afford to go away and study in many of these places. It is also the case that most students, particularly home students, who are in private rented accommodation are not in purpose-built blocks. These blocks are expensive, highly regulated and already covered by the exemptions in the legislation. But rents for students in these blocks are far more expensive than they are in housing operated by small private landlords. The average is about £190 a week for the former and £130 a week for the latter. Without small private landlords renting out small houses and flats for students to share, the options for young people would be severely limited.

I was privileged to serve as a member of the Augar review of post-18 education and funding in England, and we were very concerned about levels of maintenance support and loans, and especially about the abolition of maintenance grants. We heard widespread concerns about the cost of student accommodation and recommended that the Office for Students should examine it more closely. But we are not going to improve quality or availability by driving large numbers of private landlords out of the student market. The current provisions of the Bill on one hand and the general demand for accommodation on the other are such that if I were a student landlord not covered by the 4A exemption, my immediate reaction would be quite simple: I would just not rent to students any more.

Amendment 40 seeks to allow all student landlords, not just those operating mass-occupancy accommodation or three-bedroom houses, to repossess a rented property in advance of the new academic year; therefore, to follow the general pattern of student accommodation. All the other conditions under this amendment set down for ground 4A would remain, ensuring that the tenants concerned are full-time students.

However, more generally, we must recognise that more needs to be done in this area, whether it is simply the amendment proposed by the noble Lord, Lord Willetts, to which I have added my name, or the more general change that is set out in the other amendments in this group. A vibrant private rented sector for students is necessary if we are going to protect and increase educational opportunity in this country. It is not sufficient, of course, but it is genuinely necessary. I hope the Minister will recognise both this and that student accommodation in general needs to be treated as the distinctive case that it is.

My Lords, briefly, I support Amendment 40, to which I added my name. I am concerned to ensure that we do not inadvertently damage further the student accommodation market. There is already a very severe shortage in student housing. The proposal to end fixed-term tenancy agreements could have such an impact. I have received very detailed briefings from UniHomes—supported, I know, by Unipol—Universities UK, HEPI and other organisations intimately involved in student housing.

Purpose-built student accommodation will be exempt from this decision, but student accommodation provided by the private rented sector is not offered that exemption. I know that the government objective, which I fully support, is to deliver security and stability to tenants, but I do not believe that the Bill, as it stands, will deliver that for all students. As the noble Lord, Lord Willetts, pointed out, on average, private sector accommodation is cheaper than purpose-built accommodation, so it is an important source of housing for domestic students who are economically disadvantaged. I hope that the Minister will recognise that possibility and not jeopardise such provision, as many think this might. It would be worth considering granting the exemption granted to purpose-built student accommodation to the student private rented sector in total. Other suggestions have been made and I hope that the Minister will consider them all to ensure the stability of student accommodation.

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.

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.

I suggest that this amendment to exempt purpose-built student accommodation from licensing schemes of local authorities would encourage more provision for students and ease pressures on the wider PRS with no negative impact on the quality of accommodation or its management. I hope it is acceptable to the Minister.

My Lords, I declare my interest in a family business that rents properties in Norwich in some small way to students. I suppose I ought to declare that I have been a student in both houses and halls, albeit more than 40 years ago.

This is a well-intentioned Bill—indeed, the Conservatives introduced something thematically similar in the previous Session—and it includes some modernisations to rebalance the relationship between the landlord and tenant, and particularly to regulate agents who act as intermediaries between the parties, but this is not the same Bill we encountered before, and in respect of students—I am bound to say of all students, including apprentices—it is pregnant with unintended consequences.

As it relates to students, it denies the obvious fact among the cohort of potential tenants that there is an annual rhythm to the demands and needs that runs from December to August annually. I was particularly taken with the noble Lord, Lord Cromwell, who has just left his place, and I was going to offer to buy him a drink in that round in the bar with the noble Baroness, Lady Thornhill. He tells me he does not drink, so it would have been a cheap round, but there we are. As a principle, efficient markets exist to align with consumer needs, and this Bill will disrupt the ability of the market to satisfy those needs of the many hundreds of thousands of students, not all of whom are fresh out of sixth-form college, to align the certainty of their living arrangements with the reality of their daily lives and particularly with their friends.

The consequence of the Bill, if enacted, is that students will pay more because the supply of rental properties will reduce by discriminating against private landlords. It will reduce the choice of landlord because it lays down in statute the sole type of landlord counterparty that students can contract with if they wish to have the certainty of an annual let, and thus it reduces the competitive pressure among landlords to keep prices down, so students will pay more.

By restricting the student let to a certain class of building, it creates monopoly powers for that expensive specialist provider that my dear noble friend Lord Willetts mentioned, so students will pay more. It will also create an overheated market in September every year because the landlord can guarantee the availability of his house only if the previous people have given notice. So, in that overheated September market, guess what? Students will pay more.

It is not just cost; the consequence of the Bill means that students will be more inconvenienced. It means that second and third-year students, the sort of people who do not necessarily want to live in hall, must fly back from a world trip, working abroad or whatever to sort out a house they could have done earlier. It is harder for friendship groups to get the certainty of a house with their friends. I do not believe that in this debate thus far we have considered the importance of cohorts of friends, who are not related and do not have the family ties that you often get in most tenancies, so you are at the mercy of the person who just wants to cut and run. If there is a joint tenancy among six friends, for example, in a larger house, and one of them wants to go, what does that do? Does it break the tenancy? How does that work? It disrupts the whole group. I believe that in the case of students, the discipline of a group of friends coming together has some value to the market.

Of course, by focusing everything in September, it makes the chaos of clearing even more chaotic than it already is. It prefers the established students from good backgrounds, with parents with sharp elbows as a means to execute draft contracts more quickly; those sorts of families also make it easier to provide the guarantor. I remember when my daughter was at Newcastle. She had taken up with a group of friends who were going to live in Jesmond, and there were six of them in the house. The landlord sent round a contract that made me jointly and severally liable for the entire rent for all of the people, none of whom I had met. Fortunately, I was last on the list. I noticed that Viscount Boyne, a former Member of this House, had signed before me; it gave me a certain comfort to know that we were going vicariously to rely on each other.

Although this Bill introduces protections for current students, it disadvantages people in the second or third year who are not yet in houses but might want to be. Not everybody wants to live in halls, particularly PhD or mature students. I have been there: you tire of the freshers running up and down the corridor in the night because they have come back late from the pub. If you want to have that quiet enjoyment of a property, you should not be forced into a student block with added charges and expensive rents.

This Bill, if enacted, will also introduce new discriminations that have not been mentioned thus far. I am thinking about foreign students. Let us not forget that foreign students underpin the university sector; at the moment, they are keeping our universities afloat with their extra fees. Foreign students who do not have a credit history, for whatever reason—there are cultural reasons that I will dwell on in a moment—will be prevented from paying up front. They will become unrentable; they will find it very difficult to get a place. Of course, these are the people whom the universities need to balance the books. The difficulty of getting guarantors and the right-to-rent checks are in and of themselves sometimes a barrier and a discrimination against foreign students.

I am thinking in particular of women students from Arab countries. I have two tenants in our own business whose mothers have come from those parts of the world in order to live with their daughters for cultural reasons. They want the annual tenancy agreement to give them in certainty their own way, so they can sort it out once then have the comfort of leaving their daughters—they tend to be daughters—while knowing that they can come back. It is an irony that, later in the Bill, Amendment 190 has a huge amount about discriminating against pets while here we are allowing discrimination against the cultures of women and girls from other parts of the world.

I regret to say that all this in aggregate means that the landlords who have specialised in renting to students, many of whom add pastoral care to the portfolio, will fall away. My wife has acted as a mother, so to speak, to many of our students, helping them with council tax bills and acting on their behalf with utilities—especially those students for whom English is not their first language and who are trying to make a way in a foreign country. All this will go because you cannot have the certainty of a contract between landlord and tenant. Why should it be for the state to determine a narrow monoculture of what constitutes acceptable student accommodation? What happened to the ability of consenting adults to work out their own decisions?

Government Amendment 202 has the absurdity of defining a building that is “occupied by students”, which excludes dwelling houses that are occupied by students. It then it requires halls specifically built for students and meeting the Unipol code of standards to be licensed even though they exceed the standards. How does this pettifogging bureaucratic interfering help the people whom it purports to assist?

When I explained to my daughter last weekend what I was going to say, it took her about 10 seconds to realise that a complicated secondary market will now develop between potential students and landlords, with informal, unregulated contracts and options—as well as fees to secure tenancies in the most desirable households with the most commodious landlords— in a way that harms exactly the sort of people the Government are trying to help: the ones who are the first in their family to go to university. By preventing more than one month being paid at a time, you will end up with more complicated escrow arrangements, fees, more expense, delay and obfuscation, as well as all sorts of connivances between cohorts of outgoing tenants with incoming tenants—on risk, of course—lining up the next year based on good friendships this year. We are formalising in statute nepotism between years to the exclusion of those who are trying to make their way.

The student market is complex, and it should reflect the world as it is. For many students, that is not the monoculture of catered halls of residence. They prefer to be in the town, close to pubs and universities. Destroying this market does not help anybody. It is full of the law of unintended consequence—a law that makes it harder and worse for the brightest and best people who want to get on, and difficult for anyone in higher education to know where they stand. They will all pay more, and this will make it easier for landlords to exploit a hot market every September.

It is just another example of Labour preferring big business, the operators of these large student schemes, over the nobility of the small family business. There is one silver lining, however: teaching students at a formative moment in their lives the adverse effects of the dead hand of the nanny state telling them what they can and cannot do is more likely to drive them to and promote the cause of capitalism than it is socialism.

My Lords, I will speak to Amendments 42 and 43 in my name. These amendments probe why the Government believe six months is a suitable cut-off for 4A, the new ground for possession, being available to landlords.

Unlike my noble friend, I declare I did not go to university, so I am not familiar with freshers running down corridors. However, I have three children, two of whom have gone to university—the first people in my family to go to university. They tell me that their experience of the accommodation was very straight- forward and it was of good quality in their eyes. I also declare an interest in that I have a third child who is currently studying for her A-levels, so I am hoping that she will go to university. I look forward to a similarly straightforward situation in terms of accommodation.

Students like to get their accommodation sorted at the beginning of the year, away from the exam period. If tenancies cannot be agreed early on, this will lead to uncertainty on living arrangements and add to the stresses that students face. Most tenancies begin in July, and therefore the hunt for student accommodation will begin during exam periods. Can the Minister tell the Committee whether the Government consulted students and, if so, to what extent? Have the Government even considered the impact on students? It is very important that, at exam time, they are focused on their exams. Landlords like the certainty that their accommodation will be filled. Have the Government consulted landlords and, if so, to what extent? As my noble friend just said, the larger organisations that run this are one thing, but have the many family-run businesses also been consulted?

More broadly, the combination of ending fixed terms, introducing a two-month notice period and restricting rent payments in advance could disrupt the traditional student housing cycle, making it harder for students to secure accommodation early and reliably. We argue that the student model does not fall comfortably within this Bill, and that the student model is one that existed for some time for many years—successfully, in my experience. This change aims to discourage landlords from signing up students for tenancies months in advance, which is currently common practice, and I would be grateful if the noble Baroness could reassure me on those points.

My Lords, I thank the noble Baroness, Lady Scott, and the noble Lords, Lord Willetts, Lord Evans, Lord Young—albeit that his amendment was very ably proposed by the noble Lord, Lord Willetts—and the noble Lord, Lord Best, for their amendments, and the noble Baronesses, Lady Wolf and Lady Warwick, and the noble Lords, Lord Shipley and Lord Fuller, for their comments during this debate. All these amendments seek to revise or introduce provisions in the Bill related to students, and I say well done to King’s College for having its team approach to this Bill in the Chamber today.

We do not expect that removing fixed terms will have a destabilising effect on the student rental market. New possession ground 4A will give landlords confidence that they will be able to regain their property to move in other students in line with the academic year. If tenants leave a tenancy early, the landlords will be able to find new tenants to take their place. The end of a fixed term does not automatically give the landlord possession. Landlords still have to follow the correct possession procedure. If fixed terms remained in the future, landlords would still need to follow the correct possession procedure.

Amendment 7 would allow fixed-term assured tenancies if the tenant was a student at the beginning of the tenancy. It would not be either right or fair for students to have less flexibility than other tenants just because of their educational status. Students who drop out of university could be required to pay rent for the rest of the fixed term, which could potentially reach thousands of pounds. All renters, including students, should have access to the benefits provided by the Bill.

The opportunity referred to by the noble Lord, Lord Willetts, is, as he rightly said, the meeting between housing and higher education. As someone who undertook a degree as a mature student with three children and a full-time job, I say that we simply must not assume that all students are the same. This is the opposite of elitism. It is ensuring that all student circumstances are taken into account and that those who need the greater stability that assured tenancies offer can have that option.

We have introduced a new possession ground to allow the cyclical nature of the student market to continue and provide landlords with confidence. This strikes the right balance and, in our opinion, is the much better approach. Referring to the question from the noble Baroness, Lady Scott, about tenancies in halls, the Government intend that any new purpose-built student accommodation tenancies created after transition will be exempted from the assured tenancy system following transition, as long as the landlord is signed up to a government-approved code of conduct. I hope that answers her question. For these, reasons I ask the noble Baroness to withdraw her amendment.

Amendment 40 seeks to expand ground 4A, which allows student tenants living in HMOs to be evicted in line with the academic year. It would allow students living in self-contained accommodation—one-bedroom and two-bedroom properties for example—to be evicted each year, and it seeks to address the concerns of some noble Lords that the existing scope of ground 4A does not cover all student properties. We have thought very carefully about the design of ground 4A. Limiting it to HMOs captures the bulk of typical students—that is, groups living in a house share. Meanwhile, students who need more security of tenure, such as single parents living with their children, postgraduate couples living together who have put down roots in an area, or families containing students, will be protected.

The core principle of the Bill is that tenants should have more security in their homes, and we think it is right that these groups should not be exposed to potential eviction using ground 4A. Self-contained one-bedroom and two-bedroom homes are also easier to let to non-students than student HMOs are, so, if a landlord cannot gain possession in line with the academic year and the tenants leave in the middle of the next one, the landlord is highly likely to be able to let the property out to non-student tenants. The noble Baroness, Lady Wolf, referred to student accommodation in London, and I imagine that there are other places where costs are prohibitive, such as Cambridge and Oxford. However, the Government’s action to increase supply is critical here. It is only by increasing supply that we will be able to stabilise rents. I do not think that the action proposed in the amendment would have that effect.

Amendments 41 and 45, taken together, seek to remove the requirement for a landlord intending to rely on ground 4A to give prior written notice to the tenants. This would mean that landlords renting to students in HMOs who satisfy the student test would be able to rely on ground 4A without giving tenants written prior notice, before the tenancy was entered into, of their wish to be able to recover possession using ground 4A. We cannot accept these amendments. The core aim of the Bill is to enhance the security of tenants in the private rented sector, including students. The prior notice requirement in ground 4A is key to this. If tenants are liable to be evicted through no fault of their own simply because of their student status, they must be informed of this reduced security before entering into a tenancy. Amendment 45 is purely consequential on Amendment 41, removing a later reference to the paragraph that Amendment 41 removes, and I therefore ask the noble Baroness, Lady Scott, not to press these amendments.

Amendment 42 tabled by the noble Lord, Lord Evans, seeks to allow the use of ground 4A in student tenancies agreed up to nine months in advance, rather than the six months in advance limitation that is currently in the Bill. Noble Lords will be aware that we introduced this measure in response to engagement with stakeholders and Members in the other place—I hope that answers the noble Lord’s question about consultation. They were concerned that students are often rushed into important decisions around accommodation before they have formed friendships or had time to properly judge a property’s condition or location.

This measure was intended to act as a strong disincentive to landlords who seek to sign students up to contracts early in the academic year. Increasing the time limit to nine months will push early sign-ups to too early in the academic year—before Christmas for a tenancy beginning in July. This entirely undermines the point of the deterrent. Six months strikes the right balance, allowing those who want to to agree a tenancy well in advance before exam season, but not too early before students have formed firm friendship groups, for instance.

Amendment 43, also tabled by the noble Lord, Lord Evans, goes even further and would extend the time limit to 12 months. For the reasons I have highlighted previously, we are of the view that six months is the right balance. Very few students sign contracts more than a year in advance, and this amendment would essentially destroy the entire premise of the provision, which is designed to prevent students being pressured into contracts too early in the academic year. For these reasons, I ask the noble Lord not to move these amendments.

Amendment 44 seeks to remove the restriction on the use of ground 4A to the summer of the traditional academic year. This would mean that students on a traditional term date, who are the majority, could be evicted in the middle of the academic year through no fault of their own. We recognise that the intent of the amendment is to ensure properties are available for students starting their courses on non-traditional dates, such as in January. However, we are content that supply will be available for these groups as previous groups on the same cycle would leave at the end of their courses, so there will be students leaving in January and students starting could take those properties. It would be wrong to expose all students to eviction in the middle of their academic year simply because, for example, a landlord found a group with different term dates who were willing to pay more. For these reasons, I ask the noble Baroness not to move this amendment.

Amendment 46 would allow landlords to evict approved English apprentices, as defined in the Apprenticeships, Skills, Children and Learning Act 2009, using the student possession ground 4A, provided all conditions for relying on that ground were met. Ground 4A was designed to capture the most typical students, such as those living in groups and away from home, on an annual letting cycle. Apprentices tend not to live that way, as they earn an income and are much more likely to live in a home they expect to stay in. I am therefore of the view that apprentices should enjoy the same security of tenure as other tenants and not fall under the scope of possession ground 4A. For that reason, I ask that this amendment not be moved.

Amendment 189 seeks to remove the private rented student tenancies from the assured tenancy system. I know there has been a lot of concern and debate over this at Second Reading and today. It would achieve this by allowing the Secretary of State to create or approve a code of conduct for student landlords and then allow landlords signed up to the code to offer tenancies that are completely removed from the assured tenancy system. This is the wrong approach: it would be wrong for students renting off-street housing, often indistinguishable from the property next door, to have an entirely different set of rights from their neighbours.

I understand that the noble Lord, Lord Young, is seeking to create consistency between private student landlords and landlords of purpose-built student accommodation, which we will exempt from the assured system through regulations. However, these are very different types of accommodation. Purpose-built student accommodation can often be rented only to students due to the nature of the property, and to be exempted in the future a private PBSA landlord will need to be signed up to the government-approved code of management practice. This code is managed by Unipol, an established organisation.

Other private rented accommodation let to students is significantly more diverse and often indistinguishable from other houses in the area. It would be wrong to remove the protections of the assured system. Other students renting privately should not be locked into fixed-term contracts or open to eviction without good reason. In addition, there currently exists no government-approved code that is relevant to such accommodation. Developing this would take a great deal of time and is likely to delay implementation of the Bill. We recognise that the student market has a cyclical business model and have therefore introduced ground 4A, allowing landlords to evict full-time students from HMOs in order to house incoming groups in line with the academic year. Ground 4A addresses the issues that the various amendments tabled by the noble Lord are, in effect, seeking to address. As such, I ask him not to move this amendment.

Amendment 266 seeks to exempt private purpose-built student accommodation from discretionary licensing where the landlord has signed up to a code of practice for managing such accommodation. Although codes of practice offer students assurance that a good standard of management is being met by their landlords, they are not tailored to addressing local issues in the way that licence conditions under licensing schemes are. Membership of the codes is voluntary, and members have an incentive to comply to ensure they can continue to present an attractive offer to students. While a failure to adhere to code standards can result in a landlord being removed from a code, licensing allows for stronger action to be taken where necessary. For example, local authorities can issue a financial penalty where there has been a serious breach of licence conditions.

We recognise that licensing can place a greater burden on landlords with large portfolios, such as those operating private purpose-built student accommodation. That is why local authorities already have discretion to streamline licence application processes and fees for such landlords. We trust local authorities to take a proportionate approach and work together with code operators and providers of these types of accommodation to make sure that licensing schemes remain focused on tackling the issues they were designed to address. I therefore ask the noble Lord, Lord Best, not to move his amendment.

I turn to government Amendments 47, 188 and 202. Currently, university-managed accommodation is exempt from the assured tenancy system, while private purpose-built student accommodation usually is not. Government Amendments 47, 188 and 202 would allow private PBSA to be subject to the same exemption, recognising that the two share many similarities. Students do not move into their accommodation expecting long-term residence, and it is right to ensure that this accommodation is available to new cohorts of students each year.

We intend that the exemption will apply only to private PBSA that is a member of the government-approved code of practice, which sets vigorous standards for the management of property and the relationship between managers and student tenants. If their membership of the code ends for any reason, so does their exemption. There will be no delay in requiring them to provide assured tenancies to new tenants. Although there is an existing power in the Housing Act 1988 to exempt PBSA landlords, it would have required government to frequently update secondary legislation with a list of landlords, causing a duplication of work between code administrators and officials and a lag in the link between code membership and exemption status.

We are also proposing an amendment to an existing power in the Housing Act 2004 that clarifies that educational establishments exempt from HMO licensing can be specified by reference to code membership and that the power can be exercised in the same way for private purpose-built student accommodation in future. The amendment also allows the scope of an exemption to be narrowed to certain groups of building, or building manager, within the membership if required.

My Lords, I am very grateful to all noble Lords who have spoken in what I consider an extremely important debate and contributed thoughtfully and constructively with their insights.

First, I would like to recognise the contribution by my noble friend Lord Evans of Rainow, who tabled Amendments 42 and 43. On these Benches, we believe the limitation may, as my noble friend said, inadvertently push the hunt for student accommodation into the January exam season and disrupt a vital time for many students up and down this country.

Amendment 40, tabled by my noble friend Lord Willetts, is right in seeking the removal of the restrictions that limit ground 4A to properties with three or more bedrooms. As I alluded to in my opening remarks, student accommodation is varied in type and size, and the legislation should accurately reflect and acknowledge this diversity. We will work closely with my noble friend on this issue, and we agree that the Government must look into it very closely.

The contribution from the noble Lord, Lord Best, and his Amendment 266 rightly highlight the Government’s commissioned, independent review into licensing. It is vital that we improve the availability of much-needed student accommodation schemes without compromising the quality of that accommodation. I am particularly interested in how the exemption of purpose-built student accommodation from licensing could remove unnecessary costs for providers. As we have heard from the noble Lord, this can amount to hundreds of thousands of pounds, thereby improving scheme viability and enabling the delivery of more student beds if it were removed. At a time when demand for accommodation is soaring, we must ensure that supply can keep pace.

I particularly thank the Minister for her reply and for the Government’s amendments in recognition of the previous shortfalls in the Bill. If this debate proved anything, it is how technical and detailed this legislation is. We should acknowledge the amendments aimed at updating and clarifying how certain types of student accommodation are treated under housing law.

Amendment 202 finally recognises that not all student housing fits neatly into the HMO box. However, it generates yet more questions. This amendment passes more powers to the Secretary of State. How will the Government define which educational institutions or managing agents qualify for the exemption? How will the Minister ensure that unnecessary administration is reduced? Finally, how will the Government ensure that this new clause is communicated to the market?

My noble friend Lord Fuller was therefore right to challenge Amendment 202 and highlight the issues concerning the definition of “buildings occupied by students”. This amendment requires a clearer explanation from the Government Benches, and we hope the Minister listens to these concerns before Report. I also thank my noble friend Lord Fuller for his support for Amendment 7. We agree with him that the annual rhythm of students makes their situation unique. The Bill disrupts the ability of the market to satisfy the many students already operating in an overheated market.

Amendment 189 gives the Government more flexibility to decide that types of student rentals are not treated as assured tenancies. Because of this change, the Government can limit or extend the exemption. How will the Government ensure that student accommodation can continue using fixed-term contracts by excluding them from the assured tenancy rules? Why can the Government not commit to placing this detail in the Bill?

To conclude, I urge the Minister to listen carefully to the issues raised in this group and give thoughtful consideration to the amendments tabled. The legislation is technical and detailed, and we should acknowledge amendments aimed at ensuring that this vital sector provides the accommodation that students desperately need but, at this point, I beg leave to withdraw the amendment.

Amendment 7 withdrawn.