BLOGS

A law built for the general tenant, tested hardest on student housing

The Renters' Rights Act 2025 has been framed, rightly, as the biggest shake-up of the private rented sector in a generation. Section 21 "no-fault" evictions are gone. Fixed-term assured shorthold tenancies (ASTs) no longer exist for new lettings. Every tenancy signed after 1 May 2026 is now an open-ended assured periodic tenancy (APT), terminable by the tenant on two months' notice and by the landlord only on specified statutory grounds.

For the general rental market, this is a redistribution of power towards tenants that most professional landlords can absorb, if not welcome. But for the student housing sector, which has operated for decades on a rigid September-to-June cycle, the reform lands differently. The entire economics of a student HMO — the timing of refurbishment, the certainty of re-letting, the marketing calendar for the next cohort — depended on a fixed end date that no longer exists by default.

The government has introduced Ground 4A as a partial fix, letting landlords regain possession of qualifying HMOs let to full-time students between 1 June and 30 September. But the ground is narrow, cannot be used in a tenancy's first year, requires four months' notice, and only applies to HMOs of three or more bedrooms let entirely to full-time students. Everything outside that box — one and two-bedroom student lets, mixed households, properties let to students who don't all qualify as full-time — falls into the same open-ended regime as any other rental property.

Where the supply squeeze is likely to show up first

This is where REalyse-style comparables data becomes useful for reading the market in real time, rather than waiting for the reform's effects to show up in national statistics months later.

Our rental listings data tracks live asking rents, days on market and HMO status at postcode and local authority level, which means the university towns most exposed to this change can be identified now rather than retrospectively. Cities with a high concentration of small, non-HMO-licensed student lets — think one and two-bedroom flats let to postgraduates or couples rather than three-plus sharer houses — sit outside Ground 4A's protection entirely. In these markets, we would expect to see landlords either exiting the student segment altogether or converting stock towards larger, licensable HMOs where the re-letting ground still applies.

Early signals worth watching in local rental supply data:

• A fall in new listings volume in traditionally student-dense postcode districts ahead of the 2026/27 academic year, as landlords hesitate to commit to lettings they can no longer guarantee ending on time.

• A rise in average days on market for student HMOs relet mid-cycle, since periodic tenancies remove the predictable September changeover that let agents batch viewings and minimise void periods.

• Rent growth concentrated in HMOs over smaller student flats, as landlords consolidate towards the property type that retains a workable possession route.

Sector commentary already points to smaller private landlords being the most likely to leave the student market altogether, with that stock either reverting to general residential lets or being absorbed by professional HMO operators better equipped to manage the compliance burden. If that plays out, REalyse's HMO stock tracking should show a shift in ownership concentration in student cities over the next 12-18 months, even before headline rent levels move meaningfully.

Purpose-built student accommodation is the likely beneficiary

Purpose-built student accommodation (PBSA) providers who sign up to an approved code of practice remain outside the APT regime entirely, retaining common law tenancies and the fixed-term structure that lets them plan a full academic-year cycle with certainty. University-owned accommodation was already exempt under the Housing Act 1988 and continues to operate unaffected.

That asymmetry matters for capital allocation. If private HMO landlords retreat from smaller university towns where PBSA delivery has historically been thin, the resulting undersupply falls on students with the least ability to absorb higher costs, and on the private landlords who remain, who should see stronger pricing power in the short term. For institutional investors and developers, this is a case where planning and development pipeline data becomes directly relevant to rental strategy: cities with limited PBSA consented or under construction, alongside a shrinking private HMO base, are the clearest candidates for above-trend rent growth over the next two to three letting cycles.

Gross yields in these markets bear watching closely. A tightening of supply against broadly stable or growing student numbers would typically support asking rent growth, but voids created by the transition — landlords testing possession grounds for the first time, tenants exercising two-month notice rights mid-tenancy — could offset some of that gain through lower occupancy. REalyse's yield calculations, filtered to exclude auction stock and outlier results above 20%, are well placed to separate genuine yield expansion from noise created by this transitional period.

Wider rental supply: a smaller but related story

Outside the student segment, the same underlying mechanics apply on a longer fuse. Landlords with mainstream buy-to-let portfolios lose the certainty of a fixed-term exit and must now rely on grounds such as sale, family occupation or arrears to regain possession. Anecdotal reports from agents suggest some landlords, particularly smaller "accidental" or single-property landlords, are bringing forward sale decisions rather than adapting to periodic tenancies, which would show up as a rise in stock moving from the rental to the sales market in local listings data.

The ban on rental bidding wars and the new Section 13 rent-increase process (capped at once a year, with a tribunal right of challenge) also reduce landlords' ability to reprice quickly between tenancies, which historically has been one of the main levers used to catch up with market rent after a long-sitting tenant leaves. Whether this compresses achieved rent growth relative to asking rent growth is a question best answered with achieved-versus-asking rent comparables at the local authority level, tracked over the next few quarters as APTs become the majority of the stock.

Outlook

The Renters' Rights Act's effect on student and wider rental supply will not be uniform. PBSA-heavy cities with strong exemption coverage should see limited disruption. University towns dominated by small private landlords letting outside the HMO-qualifying threshold are the ones to watch for genuine supply tightening, longer void periods and a widening gap between the properties that can use Ground 4A and those that cannot.

For investors, lenders and developers, the immediate opportunity is informational: identifying which local markets carry the highest concentration of exposed private student stock, and whether that gap is being filled by PBSA delivery or simply left unmet. Comparables, HMO stock data and planning pipeline visibility, read together, are the fastest way to answer that before the next academic year's letting cycle confirms it in the numbers.