The Renters’ Rights Bill: What It Means for Student Landlords and the Future of HMOs
As many of you will know, the Government’s Renters’ Rights Bill is now moving through Parliament, and it looks set to bring some of the biggest changes we’ve ever seen in the rental sector.
For landlords who let to students, these changes could reshape the traditional HMO model that’s worked successfully for decades.
While the details are still being debated, the direction of travel is clear: fixed-term tenancies will disappear, and all new tenancies will become rolling, periodic tenancies with no set end date.
Normally, we’d be preparing to start marketing student properties around this time of year. However, before we go ahead, it’s important to understand what’s changing and to decide together what approach will suit your property and your goals best for the coming year.
1. The End of Fixed-Term Tenancies
Under the new system, every tenancy will roll from month to month with no fixed end date. Students (and all tenants) will be able to end their tenancy at any time by giving two months’ notice, which takes effect at the end of a rental period (typically the next rent due date).
That means:
- You’ll no longer know for sure how long a group of students will stay.
- Tenancies will be less predictable; some students may leave after Easter, others may stay through summer or for another year.
- You could face longer void periods between tenancies, especially in the early summer months.
This unpredictability will make planning refurbishments, cleaning schedules, and relets more complicated. It may also affect insurance, as some policies don’t cover long empty periods.
2. The End of Joint Tenancies
At present, most student groups sign a single joint tenancy agreement. Under the new rules, if one tenant serves notice to leave, the entire tenancy will end for everyone.
That means landlords will have to decide whether to:
- Continue letting the property as a whole, with the risk that a single tenant’s decision ends the tenancy early, or
- Move to letting by the room, creating separate agreements for each student.
Letting by the room could reduce the risk of a full group moving out unexpectedly, but it increases admin, compliance requirements, and costs. It also changes the dynamic of shared houses; groups of friends may prefer to rent together elsewhere.
3. Rent Payments: Monthly Only, No Rent in Advance
Another key change is around rent structures:
- Rent periods can be no longer than one month, meaning landlords can no longer collect termly or quarterly rent.
- Rent in advance will be banned, which currently helps many landlords manage risk when letting to international students who have no UK guarantor.
This will make it harder to take on overseas students unless they can provide a UK-based guarantor or use a professional guarantor service. We are already in contact with a provider who can help with this; more details will follow once the Bill’s details are confirmed.
Tenants can still choose to pay rent ahead voluntarily, but landlords can’t make it a requirement or incentivise it with rent discounts. Likewise, offering “reduced summer rent” would breach the rules if it means rent varies by month.
4. Council Tax and Empty Property Costs
Full-time students are exempt from council tax, but if your property is empty for any period, you’ll become liable for the full charge. Some local authorities even apply surcharges for empty or second homes.
If your student tenants move out in April or May, this could mean several months of extra cost unless new tenants are found quickly.
5. Ground 4A: A New Route to Regain Possession
The Government has recognised that student lets work differently from ordinary rentals, and so the Bill introduces a new “Ground 4A” for possession — specifically for landlords who let to full-time students in HMOs.
This new ground allows you to regain possession so that you can relet to another group of full-time students, but it comes with strict conditions:
- All tenants must meet the “full-time student test” at the start of the tenancy.
- The landlord must have reasonably believed this at the time.
- You must have given tenants a written statement at the start explaining that you may seek possession to relet to other students.
- You must give at least 4 months’ notice, and it can only expire between 1 June and 30 September each year.
- You can’t rely on this ground if the tenancy agreement was signed more than six months before the students took possession (so marketing will need to start later in the year).
If one of your tenants later drops out or switches to part-time study, you can still rely on Ground 4A, provided you had reasonable grounds to believe they were full-time when they moved in.
Is Ground 4A Actually Useful?
In theory, yes — it gives a defined legal route to recover possession between academic years.
But in practice, it’s quite restrictive:
- It may delay your marketing cycle, as you can’t sign up next year’s group as early as before.
- The 4-month notice and summer-only expiry mean there’s little flexibility.
- Most student tenants move out voluntarily at the end of the year anyway, so many landlords may find it easier to avoid serving a notice at all.
If you do use Ground 4A, communication will need to be handled carefully. The Bill makes it clear that landlords and agents must not “purport” to serve a notice to quit or end a tenancy unless they’re doing so properly; otherwise, there’s a risk of civil penalties up to £7,000.
This is one area where we’ll be happy to advise you individually once the Bill becomes law, so we can apply the safest and most practical approach.
6. Pets in HMOs
The Bill also gives all tenants a new right to request a pet, and landlords must have a “reasonable reason” to refuse.
For shared houses, it’s expected that landlords will be able to say nowhere pets are impractical, for example, for HMOs with multiple unrelated tenants. But we’ll need to see the final guidance to confirm what counts as “reasonable”.
7. Strategies for Landlords to Consider
Here are some of the approaches other landlords are starting to explore to manage the risk and disruption of the new system:
- Adjusting tenancy start dates (e.g. June or July) to reduce the summer void period.
- Letting rooms individually to limit the risk of one tenant ending a full group tenancy.
- Delaying marketing to the new year (January–March) to stay compliant with Ground 4A and reduce early sign-ups.
- Switching to a serviced or licence model (similar to short-term lets), though this can be risky legally and may not be suitable for all HMOs.
- Increasing monthly rent slightly to reflect shorter expected tenancy lengths.
- Using the summer period for short-term lets or Airbnbs, though this involves extra management and compliance. In addition, in Worcester, this could affect the planning status of your HMO.
- Transitioning to a different type of tenancy, such as:
- Residential letting (single household or long-term tenants)
- Corporate or supported living lets
- Selling to another investor and exiting the student market altogether.
8. The Student Market Still Has Strength
Even though the Bill adds uncertainty, student demand itself isn’t going anywhere.
In fact, if some landlords choose to leave the sector, those who stay may find demand increases, especially for well-managed, good-quality HMOs in prime university areas.
However, the model will need to evolve. Planning for shorter stays, variable voids, and tighter notice periods will be key.
9. How We Can Help
Every property and every landlord will face this transition differently, which is why we’re offering all our landlords a personal review meeting.
In that meeting, we’ll:
- Assess how the new tenancy rules could affect your property.
- Review your current strategy for 2025–26.
- Explore options, from student lets to residential, supported living, or even exiting the market and selling to another investor.
- Help you decide the most practical, profitable, and compliant way forward.
We can then assist with whichever path you choose, whether that’s marketing for next year’s student intake, converting to residential letting, or repositioning your property for alternative tenants.
Final Thoughts
The Renters’ Rights Bill is designed to create flexibility for tenants, but it undoubtedly introduces uncertainty for landlords. For those with student properties, the traditional model of fixed annual tenancies will change significantly.
The key now is to plan early, stay informed, and make strategic decisions based on your property type and goals.
We’ll continue to monitor the Bill’s progress and keep you updated as details become law, but in the meantime, we’d strongly recommend booking a review discussion so we can help you prepare for what’s coming.