Students struggle as Scottish housing crisis worsens

I’ve never been involved in student lets however, it would see a logical conclusion of stricter rules that some landlords will switch to standard lets or non-student HMOs.

https://thebla.co.uk/scotlands-landlord-exodus-and-rental-market-crisis/#:~:text=What%20has%20caused%20the%20exodus,an%20anti%2Dlandlord%20political%20environment.

What has caused the exodus of landlords from Scotland’s private rental sector?

The departure of landlords is largely attributed to a combination of increased taxation, stricter regulations, and what some describe as an anti-landlord political environment.

These factors have made it financially challenging for landlords to operate, prompting many to exit the market.

How many landlords have left the market in recent years?

Since May 2019, nearly 50,000 single-property landlords have left Scotland’s private rental sector. The number of registered landlords has dropped from 228,212 in May 2019 to 179,516 as of June 2023.

The principal reason for the crisis in student accommodation in Scotland  is the banning of fixed term tenancies. If Labour gets through the Renters Rights Bill the same situation will happen in the rest of the UK. It's promised for the summer of 2025 and will come into immediate force. It will be the greatest bombshell I've ever known in all my 45 years of managing my student houses. It's questionable what will happen to leases agreed this November/ December when new tenants for the following academic year are taken on. 

Reply to the comment left by Yvonne Francis at 30/09/2024 - 11:12
If some students decide to stay on after they have completed their studies (and presumably keep up with the rent), then the house would just have to become a standard or mixed HMO. It would probably end up as a standard HMO as incoming students would not want to pay the council tax. Ultimately, students could just end up sharing with non-students and have to pay the extra, which would be great for council finances of course.

Reply to the comment left by Peter Merrick at 30/09/2024 - 11:53
Hi
There are a few discrepancies in your comment. To start, you would not get 'mixed' tenancies because it's usual for a student house to have a joint and severally liable lease which means they only come as groups. They could, and funnily enough I have one working tenant at this moment, but she is a replacement for one student who could not take up the tenancy but it's the only time I have ever known, so they (nearly) always come as a group of students.

As I have learnt from my present situation with one working student, the Council Tax will be on that tenant and that tenant alone. The working person had it all worked out and it was hard to refuse.

I believe there will be provision for a student landlord to give notice so they can't stay on, and if this goes through it will be a help but I will still be at risk of being nearly three months empty. What landlord will tolerate this? There are ideas to make this work but that's another tale to tell.

Reply to the comment left by Yvonne Francis at 30/09/2024 - 12:24
Yes, that is exactly the sort of scenario I was thinking of. If you don't get any concessions re fixed term for a wholly student-based let, then inevitably the distinction would be lost and you could easily end up with a mixture of students and non-students, which would incur council tax liability. It's unlikely in most cases that the non-student(s) would be willing to foot the bill for this on behalf of the students (yours being an exception), as it would make it more expensive then sharing only with other non-students.

Students' exemption from council tax is hard to defend given they have to pay out loans for university fees and maintenance costs now. Almost all other council tax exemptions have been abolished, so what's so special about students? And why should councils with large student populations be penalised with lower incomes?

This whole "student housing" thing just seems deeply archaic to me. They should take their chances in the HMO market like everyone else. If they want to form groups and landlords like the idea, then fine, but that should be no different from a group of workmates or Spareroom's "buddying up" option.

But oh, the students complain, we don't want to pay rent over the long summer vacation. Well, excuse me for not reaching for my hankie. Fixed-term tenancies are being abolished anyway, and if students want to live with mummy and daddy or find themselves in Bali or take a summer job, that's their business, but - really! - stop being so entitled! They should smell the coffee, find an acceptable replacement or stump up the rent themselves over the dummer, just like everyone else would have to if they move away temporarily.

Reply to the comment left by AnthonyJames at 01/10/2024 - 22:38
Antony I'm really wondering what's rattled your cage. I don't know what houses or students you are basing this on but my students pay for fifty two weeks and no one complains. And another thing: Councils do not lose out on student houses, they are compensated by the general government. What on earth is "budding up". The students I have easily make groups and stick together.
https://assets.publishing.service.gov.uk/media/5a798cf3ed915d042206950c/2137540.pdf

So the government ban fixed term tenancies, landlords exit the student letting market on mass as a result and the student housing charities think the answer to the resultant supply crisis is introducing rent controls? The student market relies on fixed term tenancies. Tenants need to know that houses will be available at the right time during the annual letting cycle, and landlords need to know that they are not going to be stuck with financially unsustainable void periods if tenants have the ability to vacate mid term when there are no replacement student tenants looking for rooms. It really isn't rocket science.