Every September parents up and down the country pile car boots high with duvets, toasters, towels and bottle-openers to take their 18 and 19-year-olds to university for the first time. It’s a moment that feels as seismic as their first day of school.
If they are lucky enough to get a place in halls – purpose-built student accommodation – the rent usually includes bills; and although the average rent is £155 a week, this varies hugely.
Yet within months they will need to make living arrangements for their second year – and that’s where things get more complicated…and expensive.
Parents must beware of the sneaky clauses and pitfalls tied into student landlord tenancies that can cost them hundreds of pounds, and in some cases even damage their credit rating.
There are also handy tips they can warn their children about to make sure they don’t get caught out and lose their deposit at the end of the tenancy.
The first hurdle to note is that most student landlords insist on parents or guardians signing the rental agreement as guarantors, since students have little credit history. Many parents – myself included – unthinkingly sign it and stump up the deposit – usually one month’s rent – in the expectation that it will be repaid when our student offspring moves out.
Within months they will need to make living arrangements for their second year – and that’s where things get more complicated…and expensive, writes Annabel Venning
A shortage of student accommodation is pushing up costs, with mum and dad having to act as a guarantor for landlords and will be liable if things go wrong
However, this isn’t always how it goes. Lost deposits, missed rent, arguments over bills – there are pitfalls aplenty for students, parents, and landlords when it comes to student accommodation.
As guarantors, if any of the tenants – your child or one of their housemates – fails to pay the rent, all tenants and all guarantors are jointly liable.
And if the landlord goes to court to recover unpaid rent, you will get dragged into it, too, even if your student is up to date with their portion of the rent. This can have repercussions for your credit rating for six years if a County Court Judgement (CCJ) is awarded against you.
So, it pays to pick not just your house but your housemates carefully – not easy when there is pressure to sign up to your second-year tenancy within weeks of arriving as a first year.
It also pays to go over the tenancy agreement with the finest of toothcombs.
Check the legal obligations – are tenants allowed to smoke? If they aren’t and they do, they – and you – could be in trouble.
Houses of full-time students are exempt from council tax. But are bills such as gas, electricity, water, internet, and TV licence included? If not, how much are they on average? Ask the current tenants.
If the house is badly insulated, heating bills can become unaffordable.
Many tenancy agreements include the obligation to keep the property adequately ventilated to keep damp and mould at bay. So, if you try to keep the heat in by keeping windows closed, this could break the terms.
Landlords are obliged to have an EPC – Energy Performance Certificate. But these last for ten years, during which time the heating system might have been changed for better or worse.
Many first-year students have to start arranging their second year living arrangements within months of arriving
This was the case when my son Will rented a house in his second year at Falmouth university two years ago. The landlord had recently installed an electric boiler that was inadequate to heat a seven-bedroom property, especially one where damp was already present, evidenced by green algae growing on the front wall.
This should have been a red – or perhaps green – flag, but with so few student houses available, they moved in – and soon regretted it.
Even heating the house to a barely habitable 15C cost £25 a day, so the mould only got worse. Black spores spread across the bedroom walls. When he and his housemates – all suffering coughs and colds – complained to the landlord, he blamed them for not heating and ventilating the house sufficiently. It was never resolved.
Alex Stanley, the National Union of Students Vice-President Higher Education, says: ‘Students are facing a housing crisis. Not only is housing unaffordable, the housing that is available is unsuitable; poorly insulated, full of mould and pests, and with landlords that are reluctant to do anything about it.’
But these are tough times for student landlords, too. Increased regulation and steep interest rate rises in recent years have sent their costs spiralling, says Chris Norris of the National Residential Landlords Association.
He says: ‘Two-thirds of the market have buy-to-let mortgages. If the mortgage is substantial and they have gone from 1 to 6 per cent interest, then it’s hard to just break even. Four per cent is the typical yield from student properties.
‘A lot of landlords are now thinking about selling. If the government hits landlords with any further regulation, then some might decide to sell up and put their money in something more secure with lower risk and make 4-5 per cent interest – the same as they get from rent but without the hassle – leading to more shortages and higher rents.’
Regulations have added substantial costs for landlords. HMO (House of Multiple Occupancy) licences required for properties housing more than three tenants cost landlords £500 per annum per property, fire doors – compulsory throughout properties – are £1,000 each, then there are the fire risk assessments, Legionella risk assessments (Legionnaires’ disease is a potentially fatal form of pneumonia caused by inhaling infected water droplets, and man-made hot and cold water systems can provide an environment where Legionella can grow), gas safe certificates, electrical installation certificates.
On top of these are the additional costs caused by tenants with no experience of running a home.
This can lead to disputes over what constitutes ‘fair wear and tear’ between landlords and students. All landlords are legally obliged to place deposits (usually one month’s rent) in a government-backed deposit protection scheme (DPS). Tenants should get their deposit back, minus deductions for damage but they should not be charged for ‘fair wear and tear’.
‘With student tenants there is a very high level of wear and tear,’ says one landlord.
‘Washing machines are always overloaded and never cleaned so rarely last for more than two years before needing to be replaced. Tumble dryers are also overloaded, and filters rarely emptied so the motors burn out after a couple of years. Microwave ovens are never cleaned and rust so badly during 12-month tenancies that they must be replaced annually, along with toasters and kettles.
‘In more than 12 years as a student landlord only about 10 per cent do any cleaning during the tenancy. Bathrooms get into such an awful state that baths and showers need to be regrouted each year due to mould growth from lack of any cleaning.’
If one of your housemates breaks the tenancy rules, such as smoking when it is banned, all the students in the house will be liable
However, many landlord-student relationships are harmonious and trouble-free. Communication is key, advises Sarah Black, who became an ‘accidental’ student landlord when she bought a property in Bath after her son, a student there, struggled to find anywhere to live, and now has six student properties.
Sarah has a Whatsapp group with all her tenants and encourages them to communicate via this, which ensures that problems are nipped in the bud. She is forgiving about ‘learner’ tenants’ mistakes, such as those who ask for a replacement for a ‘broken’ lamp which turns out to simply need a new bulb.
She urges students to carefully check the itinerary supplied by the landlord or their agent, going round the house with them on the first day of the tenancy, and pointing out any discrepancies or damage.
‘Take photos of any marks or damage not on the inventory, and report anything, no matter how small, such as a broken drawer, hanging rail, or even a bad smell as quickly as possible. Put it in writing so you’ve got something to refer to when moving out.
‘A lot of students don’t realise that they need to participate in the inventory-taking that first day. If things go wrong, such as a leak, landlords want to be told straight away, even if it’s 11pm on a Sunday night, which it frequently is!’
With the new government promising further regulation in a Renters’ Rights Bill, costs could rise further for landlords, while the shortfall of student housing is set to get worse. In cities such as Manchester and Bristol the shortfall is already increasing by 100,000 beds a year.
More purpose-built student accommodation (PBSA) is being built. But in the meantime, students and their parents would be well advised to treat their house rental like hiring a car: take pictures, go carefully, and return it with exactly what was in it when you took it on.
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