Victoria Tolmie-Loverseed gave evidence.

Good afternoon. Thank you very much for coming along. Would you like to introduce yourself, please?

Victoria Tolmie-Loverseed:

My name is Victoria Tolmie-Loverseed. I am deputy chief executive at the student housing charity Unipol Student Homes.

The acoustics in this room are notoriously bad, so it would help us all if you were able to keep your voice up, please.

Victoria Tolmie-Loverseed:

I will do.

Q The situation with student rentals has been a much aired part of this process so far. Can I ask a couple of questions about the way in which the Bill interacts with students? The first is around the Bill exempting purpose-built student accommodation from the move to periodic tenancies. We have heard mixed feedback about the impact of that on students, particularly on those who may know they will be in a particular place for two years, let us say, and might wish to secure a property for that period. Do you agree with that exemption, or do you have other views that you can share?

Victoria Tolmie-Loverseed:

I agree with that exemption. Purpose-built student accommodation exists for a very specific purpose. Therefore, operators of that kind of accommodation need to ensure that they are renting only to tenants—they need to have the means to regain possession. Often, they have planning obligations linked to the fact that they should only house students in that type of housing, so if they had a situation where students were able to stay for an indefinite period, they might start to have non-students living in the accommodation, which would be problematic for the ongoing management of the property.

Q Do you have a view of how that impacts on, or relates to, property that has been converted to be student accommodation, as opposed to that which is purpose built? Many of us have universities in near proximity to our constituencies, where often a large number of houses have been turned into student accommodation. The university would not wish to see that accommodation lost to the student market, although the accommodation is not purpose built.

Victoria Tolmie-Loverseed:

Yes, that is problematic. Every year, about 700,000 students live in the kind of housing that you describe, which I will call off-street housing. I hope everybody knows what I mean by that: a shared student house or flat that is not in purpose-built accommodation. About 700,000 students rely on that type of housing every year. It is more affordable, and it is available when students need it, which is at the start of their academic cycle. We are concerned about the potential loss of that housing, and we are concerned that because of elements of the Bill, it could become more expensive over time. It is an affordable part of the student housing sector at the moment. Rents are generally much lower than for other types of student housing—about £130 a week, on average—so it supports students with lower budgets to live at university in a more affordable way. We are concerned about the loss of that type of housing.

Q Propertymark called for new grounds that would allow landlords who rent houses—HMOs, or houses in multiple occupation—to students to seek possession in advance of the academic year. Do you agree with that suggestion, or do you have an alternative way to address the concerns that you outlined?

Victoria Tolmie-Loverseed:

In principle, I support the idea that landlords who are part of some sort of accreditation or recognised scheme should have an exemption for their accommodation in the same way as PBSA does. There are other ways of doing that. We at Unipol submitted some evidence with a suggestion that there should be a student tenancy for use in the off-street housing sector, which offers a fixed term with some other elements to it that would be very advantageous to students. Student housing is niche—it is very specific and has a very specific function—and certain practices and elements in there we think need special attention.

A fixed-term tenancy for students would allow landlords to regain possession but provide the security of a fixed term to students, as well as benefits to them that speak to their specific needs. For example, people should not be able to use guarantors for students—that is restrictive and difficult for students from low-income backgrounds —and students should be able to give notice in certain circumstances, such as if they have left their course. If they are no longer at university, it would be very handy if they could give two months’ notice and that is that. We think that would be right.

We also think that there is a real problem of early renting in the world of student housing—students who might need a tenancy from July end up renting places in September and October, because of pressure in the market. There is a shortage of student housing, and that is a real issue, so students rent earlier and earlier to get ahead of the market. We think that a cooling-off period should be attached to a student tenancy.

Those are real pressures and difficulties that students experience, so we think that they need special treatment in the Bill. As I said, there are 700,000 students, which is not an inconsiderable number. They should have special treatment.

Q I would argue that we are giving students special treatment. To be entirely candid, I took some time to come to a view on what we should do in this area. We want students to benefit from the new system, but it has unique characteristics and we want to protect the supply of student accommodation. I do not know whether you are familiar with the previous Government’s Bill, but we have narrowed the grounds for possession in an attempt to capture a typical student and not a non-typical student—say, an adult learner with children who is living in a more non-typical student property. Do you think we have that right? Are there any ways in which you would tweak it?

If we were looking to take action on sign-ups in advance, what is a reasonable period when landlords should be able to ask students to sign up in advance that does not, as you say, force them all to sign up far too early and in ways they may regret or have to re-examine? What is an appropriate period in which a sign-up would be reasonable? Lastly, do you understand why the sign-up arms race, as I might put it, has developed? It is hard to find an explanation for why all landlords are locked into a cycle of earlier and earlier sign-ups; it seems to have developed organically. Could you outline why you think that problem has arisen in the first place?

Victoria Tolmie-Loverseed:

To take the first point, in the Bill you have proposed ground 4A for possession of student tenancies. That is definitely a helpful addition and we were glad to see it brought forward. However, at the moment it is just for HMOs, which we assume is deliberate wording, so it is for properties with larger groups of three or more people living in them, and you have excluded one and two-bedroom properties. We think that will result in a loss of smaller properties from the student housing sector.

The sector is quite particular. These properties have been set up close to universities, and the businesses are run in a particular way. I can understand why you might think that one and two-bedroom properties would perhaps have more mature students or students with families living in them. Often they do, but the reason why all students rent all properties in the student market is to do with them being at university. Generally, they are in that city and living in that housing only because they are at a university nearby.

We think that excluding one and two-bedroom properties is problematic, because they are quite a big part of the market—more than you would think; it is not just mature students or students with families. A national advertising platform called Accommodation for Students has given us some data on this, and 31% of the properties listed on its website nationally are one and two-bedroom off-street houses. If you were to lose that amount of property from the student market, that would be problematic. I think that is likely, because if you are in a one or two-bedroom property and you can have an indeterminate tenancy and give notice at any point, you may give notice in January when there is no demand for students, and that property will end up leaving the cycle of the student market and going into the professional market.

The average is 31% across the Accommodation for Students website, but in some locations it is even higher. In Newcastle and Preston, over 50% of the properties advertised are one and two beds, so it is not just mature students; it is younger undergraduates who are living in those types of houses because they suit their needs and they are available. Losing them would be very problematic over time and would reduce the supply of housing available to students.

The second part of your question was about cooling-off periods and early renting. Why does it happen? I think it is a mixture of things. Students want to secure a nice house, so they go out early and try to beat the rest of the market. In some cities, there are shortages of accommodation because student numbers have increased considerably over recent years, and there is a cap on the amount of off-street housing that there can be because of planning—article 4 direction—so we are not making any more shared student housing.

Students are aware that there is a shortage, and if they want to get the house that they want, they will try to get out there earlier and earlier to beat the market. That is why it happens, but it is really problematic, so we would like it to not happen. We have suggested that if you could say to students that they could cancel that agreement up to four months before the tenancy was due to begin, it would stop early renting. There would be nothing in it for landlords to try to get properties signed earlier and earlier, because students would be able to drop out. We do not think that would be problematic. It will not be an issue for landlords as the properties will still be let, but hopefully it would stop the silliness.

Q That is very useful. I have one final question. The previous Government did this as well, but the case for a specific ground for possession to ensure that the cyclical nature of the student market continues arose from engagement that said that we had to treat this differently. We do not have much data, and I wonder if you have any from your experience or what you pick up on anecdotally. How often do you think the ground for possession would actually be used? If I am being entirely candid, in my mind I can imagine it sitting there and maybe being of use on the odd occasion, but broadly I do not think that students overstay. Am I right in thinking that?

Victoria Tolmie-Loverseed:

No, they do not at all. It is not a problem. No-fault evictions are very rarely, if ever, used in the student housing market, because the need is cyclical, and generally most students will very happily move out when their tenancy is finished. I think it would be used very rarely, but it sends a useful signal that it is time to think about leaving.

The real issue for me, and the more problematic thing that will stop the cyclical nature of student housing, is the ability of students to give two months’ notice. I understand not wanting to treat students differently from the rest of the market, but the need for housing is so tied to the particular reason of being at university. Most landlords deal with their tenancies on the basis of 12 months, and they set their rents on an annual basis. If you say, “Your tenant is able to give notice, and they might choose to leave in April or May,” those landlords will respond to that and think, “I will have to increase my rent, because I have an annual rental figure that I need.”

Q Their yields are quite generous as they are, compared with what is normal.

Victoria Tolmie-Loverseed:

I do not have a tiny violin for landlords, but I am just saying what we think is likely to happen. It is a commercial operation and landlords need to cover their costs, and we think that if landlords perceive more risk they will seek to put up rents.

Your previous witness talked about the situation in Scotland. One of the things we would really like the Government to do before going much further is an impact assessment on the student market, particularly looking at Scotland, because the evidence there about student homelessness as a result of the tenure changes is compelling. The Government in Scotland have a committee looking at how they can tackle the issue of student homelessness, and I think that is a bit of a warning for us all that we could very well be in that place in a couple of years’ time if we do not think about the student market, its particular characteristics and what it needs.

Q I have raised this already, but you seem to be suggesting that to extend the exemption you would have a special student tenancy. Is that right? Could you clarify if you would like to see that in the Bill? If not, if the Government were not willing to create a new tenancy, how would you draw the line in terms of bringing in all student accommodation?

Victoria Tolmie-Loverseed:

I think there are alternative options. There was discussion on the previous Bill about creating an accreditation scheme or some sort of certification for landlords in the off-street sector. That is worth considering if a landlord is part of a quality mark and might be able to offer fixed-term tenancies similar to PBSA. There would certainly be some benefits to that, and you would offer students a quality product with landlords who are accountable to somebody but can have certainty in their business planning, which would be beneficial. I also think that ground 4A should be amended and extended to all student properties.

Q On that point, how would you define “all student properties” in the Bill?

Victoria Tolmie-Loverseed:

We think that the definition of a student property in the Bill is fine; it is just the restriction to HMOs, which are three-bedroom properties. We think the definition of the type of property, or the size of the property, should be changed.

Q So would it be any property where one of the tenants was a full-time student? How would you define that?

Victoria Tolmie-Loverseed:

The way the Bill is drafted at the moment, they all have to be students for that to apply.

Q So that would be the control?

Victoria Tolmie-Loverseed:

Yes.

I wanted to pick up on a couple of points from your written evidence on joint tenancies. Under the new Bill, if one student leaves, you have the problem where the whole tenancy might end up collapsing. Do you have any thoughts about what the Bill could do to address those concerns, save the arguments that you have already made about having a specialist student tenancy? Also, on that point about the student tenancy, would you agree that there is a bit of an issue at the moment Q wherein quite a lot of students drop out of university, which is an issue in and of itself, but are locked into tenancies? Would this Bill address that situation?

Victoria Tolmie-Loverseed:

The joint tenancy issue is problematic, and there is no way to get around it. If you are in a joint tenancy, all the tenants are essentially treated as one. If one tenant gives notice, all the other tenants, in theory, could be asked to leave at the same time. I think landlords will be pragmatic about it and seek to manage that process actively. Unless it is in their interests to regain possession of the whole property, I think most landlords will try to smooth things out and find a resolution.

Typically, the remaining tenants are liable for the rent on the room that has been vacated, and I think it would be very difficult for landlords to backfill, so the remaining tenants may find that the rent increases. That is going to cause quite a lot of rupture and disruption in the student market. We think about half of tenancies are on a joint basis at the moment, and that is going to be really disruptive. I cannot think of a way around it. Unless there was some sort of ability to have a fixed term, I think it is going to be really difficult. Sorry; I have forgotten the second bit of the question.

Q It was about the point that quite a lot of students drop out of university, so there is an issue, on the flipside of some of the points you made before, about those students being locked in. Would you agree that this Bill addresses that?

Victoria Tolmie-Loverseed:

Yes. I think a lot of landlords release tenants, certainly in the PBSA sector. If somebody leaves university or their circumstances change, I think a lot of landlords release tenants. I think it is right that if somebody leaves university, a landlord should seriously consider releasing them, perhaps with two months’ notice, and letting them leave. I think that would be a very good element of a student tenancy. Unipol is a landlord, and we release tenants if their circumstances have changed. It is a relatively small number of students who require that, but it is difficult. That would undoubtedly be an advantage to the students who need it.

Q I have a specific question on the new grounds for possession that we were just talking about. I interpreted the wording of the new ground that specifically gives the power to recover possession between June and September as potentially an oversight. One of the written statements we received—RRB 04, for Committee members—highlights that as well. The ground seems to fail to consider other kinds of students, such as people on a one-year Masters that starts in January, or nursing students who are often studying over the summer. I know, as I am friends with some of those people, that they found it hard enough to get housing on a non-traditional term as it was, without giving landlords a particular power to kick them out halfway through the summer when they are halfway through their course. Do you share that concern, and do you have suggestions for whether that should be changed?

Victoria Tolmie-Loverseed:

There are significant numbers of students—I do not know the exact numbers, but more and more are starting with January start dates. Some universities have five points in the year when you can start a degree or a Masters. It is problematic for Masters students whose course goes on until September or October, when they are having to write up, or PhD students. That can be difficult. I think there should be more flexibility in the current timetable of June to September, and perhaps in the ability to give notice at different points in the year for student properties.

I am afraid we do not have the flexibility to allow this question session to go on any further. Thank you very much for your attendance.