I was a student landlord with 50 houses – here’s why I’ve sold them all

After owning around 50 student houses over the years, Tom Mairs has now reduced his portfolio to zero – a decision he says was driven by the newly introduced Renters’ Rights Act. The 40-year-old landlord said the reforms have fundamentally increased the risks of running student houses of multiple occupancy (HMOs). One major concern he has is students leaving part-way through the academic year, leaving him with empty rooms and potentially significant financial losses. The Renters’ Rights Act, introduced in May of this year, abolished Section 21 “no-fault” evictions, ended fixed-term contracts in favour of rolling periodic tenancies, limited rent increases to once a year and capped upfront rent payments at one month. Tom says he got rid of his properties as the Act was passing through the commons and looked more and more likely to become law. Landlords may be concerned that they could be left with an empty home for months of the year, especially over the summer holidays, if renters choose to end rolling tenancies early. Traditionally, landlords would secure their next group of students months before they moved in. The new rules allow landlords of qualifying student properties to regain possession of their home between 1 June and 30 September – traditionally when people are on summer break – each year, so a property can be re-let to students for the next academic year. But there are conditions around how and when the tenancy is granted. Shorts ‘The market is just being obliterated’ Tom’s response to the changes has been to step away from student homes. He says he has owned around 50 individual student houses over the years in Liverpool, but has now reduced that to zero, only keeping a small number of flats in the city. Tom said: “I think the act has been devastating for student landlords and students alike. It has been a piece of legislation that has been rushed through in a one-size-fits-all fashion and will have negative effects for all. “My primary concern is that students will serve notice in February and leave in April, and you’ll be left with April, May, and June vacant. Obviously on an HMO that’s linked to any sort of mortgage, you’d be losing up to 25 per cent of your rent.” Tom, from the Wirral, purchased his properties between 2008 and 2021. He believes that if students leaving part-way through the academic year becomes commonplace, it could accelerate the loss of smaller landlords. For those who decide to stay in the market, Tom believes some may respond by increasing rents to compensate for the additional risk – and this will be passed on to students. But he was not prepared to take that approach himself. He added: “I think it is a complete oversight not to extend the legislation as afforded to student halls residents to HMOs. I think that is just absolutely crazy.” University halls remain largely exempt from the rules which allow students to terminate contracts with two months’ notice partway through the year. Landlord for the act: ‘I’m still buying, and I’ll continue to buy HMOs’ Steve Lazenby, who has roughly 400 houses in Leeds – many of which are student lets – has a very different view to Tom. He says that he remains confident enough to keep buying properties to rent out to students and he is not yet worried about the impacts of the act. Steve says the evidence so far does not point to a mass exodus of students part-way through the year. He said: “Across roughly 400 houses, we’ve had eight groups ask about breaking up mid-tenancy – equivalent to two per cent. Seven worked with us to find replacements and one moved from a five-bed to a four-bed within our portfolio. Steve Lazenby, a landlord in Leeds, says the Renters’ Rights Act has had minimal impact on his portfolio (Photo: Beyond) “We’d expect some tenants to leave in April or May but based on what we’re seeing, I’d expect the total impact to come in under one per cent.” In his eyes, the biggest change is not necessarily the amount of demand, but when landlords can secure new tenants. Before the reforms, he says more than 80 per cent of the following academic year’s student properties had already been let by the end of November but he won’t know a comparable figure until next year. The new rules mean landlords cannot grant a tenancy more than six months before it begins without losing Ground 4A protection – which allows a landlord to regain possession of certain shared student properties to let to a new group of students in the next academic year. Steve, who is a customer of Together Housing and has used their student housing financing several times, added: “In a market where Leeds groups were signing in November, that’s a significant shift. We can still view, market and talk to groups through the autumn, so tenants know their options, but the tenancy itself is granted in the window.” He did say that a full house left empty could cost thousands in lost rent. For example, six tenants at £120 per week for eight weeks is around £5,800 of lost rent on one property. But Steve does not believe that risk is enough to make him leave the market.