Landlords who rent accommodation to students are concerned about what the future holds during the COVID-19 pandemic. They face their own set of challenges in light of the fact that further and higher education establishments, including universities, are currently closed.
Across the UK, half a million students rent privately-run, purpose-built student accommodation, or rooms in university halls, while many more live in houses of multiple occupancy (HMOs). The lockdown has resulted in a crisis for students and landlords alike.
Students are struggling to pay their rent – and in many cases, they believe they shouldn’t have to while they’re not living there. However, from the landlords’ point of view, they still have mortgages and insurance to pay and it is important to keep their properties in a state of good repair.
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What are the main issues?
In the private rented sector, most students sign tenancy contracts well in advance of actually moving in. As a result, students had already paid their deposit for a home they wouldn’t be able to move into for the foreseeable future.
Many tenancy agreements were due to start in June, but it now appears unlikely the usual movement of students all over the UK to attend university will begin any time soon. In addition, the number of international students will decrease, yet they may still be signed up for a tenancy they can’t fulfil.
Much student accommodation has been empty since the end of March, as the majority of tenants opted to go home to spend the lockdown with their family. Now, as the lockdown eases slightly, people are wondering what the “new normal” will be. For both landlords and students, this is largely unknown at present.
When it comes to the forthcoming academic year, due to start in the autumn, it’s looking unlikely that colleges and universities will be open again. Cambridge University has already announced it will be running all lectures online for the academic year 2020/21.
Manchester University says all lectures for at least the first semester will be run online. Other universities are expected to follow suit. Student bodies are urging the government to instruct landlords to give student tenants the option of a no-penalty release from their tenancy agreements.
They have also suggested deposits should be returned to students who won’t be moving into their accommodation. However, this would have a negative impact on the landlords, who are already losing money on rent.
Both landlords and students have called for help and advice from the government and the higher education sector, claiming that student accommodation has become a “social justice issue”.
What is the government doing to help?
When the COVID-19 crisis was growing, the government announced payment holidays for people with mortgages. Originally, homeowners were offered a three-month payment holiday to help with their own mortgage. Subsequently, it was extended to landlords to help those whose tenants were unable to pay rent. It is hoped this will help landlords who are facing the threat of unmanageable debts.
The government announced the measures in recognition of the “additional pressures” landlords faced due to the lockdown. This means landlords who aren’t receiving rent won’t face the worry of finding mortgage payments out of their depleted income.
Once the situation gets back to normal, the government has advised tenants who are unable to pay their rent during the lockdown to come to an “affordable” arrears repayment plan with their landlord – the plan should be in line with the tenants’ individual circumstances.
How does this affect students?
While landlords have been offered the three-month mortgage holiday, there hasn’t been any firm guidance provided for students who are currently unable to move into their accommodation.
As it stands, landlords can offer students a no-penalty release from a tenancy agreement, but this is something that can be done voluntarily, at the landlord’s discretion. There is no regulation in place that makes it mandatory for student landlords to release their tenants from their obligations.
Despite some accommodation being empty, other students have had to remain in their current rented property, even overstaying the initial term of their tenancy in some instances because they’ve not been able to go home. These include international students who haven’t been able to leave due to travel restrictions and others who can’t return to their family home because of a vulnerable household member who could be at risk.
Student bodies say the government should introduce a policy of non-eviction if the occupants have nowhere else to live. However, this is just advice and isn’t mandatory. Unfortunately, around three months into lockdown, the situation for landlords and students remains a grey area.
How can landlords respond to the crisis?
Landlords of student accommodation have been advised to conform to government advice when maintaining their properties during the pandemic. They should clean all areas with a normal household disinfectant after tenants have left, particularly if it is suspected they may have coronavirus.
Wear disposable or washing-up gloves and an apron when cleaning and use a disposable cloth. Clean hard surfaces with warm soapy water, followed by disinfectant. Make sure frequently-touched surfaces, such as the bathroom, bannister rails and door handles, are cleaned most stringently.
In areas that may have been heavily contaminated, such as bathroom sinks or showers, use eye, mouth and nose protection, such as a full-cover face mask, as well as gloves and apron. Wash your hands regularly for at least 20 seconds during and after house cleaning.
Despite the government advice on keeping properties clean during the pandemic, there’s still little information available about how to deal with the financial challenges.
What is going to happen in September?
The future for new university students who should start in September is currently a grey area, as the sector waits to see how many universities and institutes of further education follow the lead of Cambridge and Manchester universities in running online-only courses.
For the student accommodation already booked in advance, it isn’t clear whether the landlords will still be paid. The student finance payment for the third term of the 2019/20 academic year was confirmed as the pandemic gathered pace.
However, there’s no information yet on whether students who have paid a deposit on accommodation for the coming year will receive any money from student finance while the universities remain closed. Student bodies say many individuals have requested a waiver on rent from their landlord, depending on how the situation develops.
However, with landlords hit hard as well, especially if the government announces an end to their mortgage holiday, this will mean there are further challenges ahead.
Furniture Pack Solutions has a range of affordable student room packages suitable for landlords, agents and universities – to help you keep within a sensible budget, while maintaining interiors during these challenging times. Give us a call on Freephone 0800 781 9427 or email info@furniturepack.co.uk for details.