Renters’ Rights Bill

Lord Fuller Excerpts

Tuesday 22nd April 2025 Lords Chamber

I suggest that this amendment to exempt purpose-built student accommodation from licensing schemes of local authorities would encourage more provision for students and ease pressures on the wider PRS with no negative impact on the quality of accommodation or its management. I hope it is acceptable to the Minister.

[Lord Fuller (Con)]

My Lords, I declare my interest in a family business that rents properties in Norwich in some small way to students. I suppose I ought to declare that I have been a student in both houses and halls, albeit more than 40 years ago.

This is a well-intentioned Bill—indeed, the Conservatives introduced something thematically similar in the previous Session—and it includes some modernisations to rebalance the relationship between the landlord and tenant, and particularly to regulate agents who act as intermediaries between the parties, but this is not the same Bill we encountered before, and in respect of students—I am bound to say of all students, including apprentices—it is pregnant with unintended consequences.

As it relates to students, it denies the obvious fact among the cohort of potential tenants that there is an annual rhythm to the demands and needs that runs from December to August annually. I was particularly taken with the noble Lord, Lord Cromwell, who has just left his place, and I was going to offer to buy him a drink in that round in the bar with the noble Baroness, Lady Thornhill. He tells me he does not drink, so it would have been a cheap round, but there we are. As a principle, efficient markets exist to align with consumer needs, and this Bill will disrupt the ability of the market to satisfy those needs of the many hundreds of thousands of students, not all of whom are fresh out of sixth-form college, to align the certainty of their living arrangements with the reality of their daily lives and particularly with their friends.

The consequence of the Bill, if enacted, is that students will pay more because the supply of rental properties will reduce by discriminating against private landlords. It will reduce the choice of landlord because it lays down in statute the sole type of landlord counterparty that students can contract with if they wish to have the certainty of an annual let, and thus it reduces the competitive pressure among landlords to keep prices down, so students will pay more.

By restricting the student let to a certain class of building, it creates monopoly powers for that expensive specialist provider that my dear noble friend Lord Willetts mentioned, so students will pay more. It will also create an overheated market in September every year because the landlord can guarantee the availability of his house only if the previous people have given notice. So, in that overheated September market, guess what? Students will pay more.

It is not just cost; the consequence of the Bill means that students will be more inconvenienced. It means that second and third-year students, the sort of people who do not necessarily want to live in hall, must fly back from a world trip, working abroad or whatever to sort out a house they could have done earlier. It is harder for friendship groups to get the certainty of a house with their friends. I do not believe that in this debate thus far we have considered the importance of cohorts of friends, who are not related and do not have the family ties that you often get in most tenancies, so you are at the mercy of the person who just wants to cut and run. If there is a joint tenancy among six friends, for example, in a larger house, and one of them wants to go, what does that do? Does it break the tenancy? How does that work? It disrupts the whole group. I believe that in the case of students, the discipline of a group of friends coming together has some value to the market.

Of course, by focusing everything in September, it makes the chaos of clearing even more chaotic than it already is. It prefers the established students from good backgrounds, with parents with sharp elbows as a means to execute draft contracts more quickly; those sorts of families also make it easier to provide the guarantor. I remember when my daughter was at Newcastle. She had taken up with a group of friends who were going to live in Jesmond, and there were six of them in the house. The landlord sent round a contract that made me jointly and severally liable for the entire rent for all of the people, none of whom I had met. Fortunately, I was last on the list. I noticed that Viscount Boyne, a former Member of this House, had signed before me; it gave me a certain comfort to know that we were going vicariously to rely on each other.

Although this Bill introduces protections for current students, it disadvantages people in the second or third year who are not yet in houses but might want to be. Not everybody wants to live in halls, particularly PhD or mature students. I have been there: you tire of the freshers running up and down the corridor in the night because they have come back late from the pub. If you want to have that quiet enjoyment of a property, you should not be forced into a student block with added charges and expensive rents.

This Bill, if enacted, will also introduce new discriminations that have not been mentioned thus far. I am thinking about foreign students. Let us not forget that foreign students underpin the university sector; at the moment, they are keeping our universities afloat with their extra fees. Foreign students who do not have a credit history, for whatever reason—there are cultural reasons that I will dwell on in a moment—will be prevented from paying up front. They will become unrentable; they will find it very difficult to get a place. Of course, these are the people whom the universities need to balance the books. The difficulty of getting guarantors and the right-to-rent checks are in and of themselves sometimes a barrier and a discrimination against foreign students.

I am thinking in particular of women students from Arab countries. I have two tenants in our own business whose mothers have come from those parts of the world in order to live with their daughters for cultural reasons. They want the annual tenancy agreement to give them in certainty their own way, so they can sort it out once then have the comfort of leaving their daughters—they tend to be daughters—while knowing that they can come back. It is an irony that, later in the Bill, Amendment 190 has a huge amount about discriminating against pets while here we are allowing discrimination against the cultures of women and girls from other parts of the world.

I regret to say that all this in aggregate means that the landlords who have specialised in renting to students, many of whom add pastoral care to the portfolio, will fall away. My wife has acted as a mother, so to speak, to many of our students, helping them with council tax bills and acting on their behalf with utilities—especially those students for whom English is not their first language and who are trying to make a way in a foreign country. All this will go because you cannot have the certainty of a contract between landlord and tenant. Why should it be for the state to determine a narrow monoculture of what constitutes acceptable student accommodation? What happened to the ability of consenting adults to work out their own decisions?

Government Amendment 202 has the absurdity of defining a building that is “occupied by students”, which excludes dwelling houses that are occupied by students. It then it requires halls specifically built for students and meeting the Unipol code of standards to be licensed even though they exceed the standards. How does this pettifogging bureaucratic interfering help the people whom it purports to assist?

When I explained to my daughter last weekend what I was going to say, it took her about 10 seconds to realise that a complicated secondary market will now develop between potential students and landlords, with informal, unregulated contracts and options—as well as fees to secure tenancies in the most desirable households with the most commodious landlords— in a way that harms exactly the sort of people the Government are trying to help: the ones who are the first in their family to go to university. By preventing more than one month being paid at a time, you will end up with more complicated escrow arrangements, fees, more expense, delay and obfuscation, as well as all sorts of connivances between cohorts of outgoing tenants with incoming tenants—on risk, of course—lining up the next year based on good friendships this year. We are formalising in statute nepotism between years to the exclusion of those who are trying to make their way.

The student market is complex, and it should reflect the world as it is. For many students, that is not the monoculture of catered halls of residence. They prefer to be in the town, close to pubs and universities. Destroying this market does not help anybody. It is full of the law of unintended consequence—a law that makes it harder and worse for the brightest and best people who want to get on, and difficult for anyone in higher education to know where they stand. They will all pay more, and this will make it easier for landlords to exploit a hot market every September.

It is just another example of Labour preferring big business, the operators of these large student schemes, over the nobility of the small family business. There is one silver lining, however: teaching students at a formative moment in their lives the adverse effects of the dead hand of the nanny state telling them what they can and cannot do is more likely to drive them to and promote the cause of capitalism than it is socialism.