Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.
Student Lettings Sector Disrupted by Renters’ Rights Act Changes
The student lettings sector is experiencing significant disruption following the implementation of the Renters’ Rights Act. Landlords and letting agents are facing unexpected financial losses this summer due to new provisions allowing students to terminate 12-month contracts that began in September 2025 ahead of their original end dates.
According to Adam Walker, a business sales broker specialising in the property sector, the legislation has disproportionately affected student lettings compared to other rental sectors. The early termination clause has resulted in many landlords holding vacant properties during the summer months with no rental income. Walker estimates that this void period could eliminate annual profit margins for affected landlords.
Letting agents managing student properties are also impacted, with no fee income for approximately three months. With most letting agents operating on profit margins below 20%, Walker suggests that many will record no profit for the current year. This disruption comes as property professionals across the sector are already navigating changing market conditions.
Walker anticipates that the sector will adapt to the new regulatory environment in two main ways. Student tenancy agreements may shift to commence in June rather than September, aligning contract end dates with the academic calendar. Alternatively, rents could increase by approximately 25% to account for expected three-month void periods.
The legislation may also accelerate landlord exits from the student lettings market, with some property owners considering sales or switching to professional tenants. Purpose-built student accommodation (PBSA), which is exempt from the new regulations, is expected to see increased development activity, although PBSA typically commands higher rents than traditional student housing.
Business valuations for student lettings have declined in response to the regulatory changes. Walker advises current business owners to delay sales for approximately 12 months to allow market conditions to stabilise, expressing confidence that demand and pricing will recover as agents develop strategies to mitigate the legislation’s impact.
The longer-term effects on the student lettings market remain uncertain as landlords, agents, and tenants adjust to the new regulatory framework. The shift in contract timing or rental pricing structures is expected to become clearer ahead of the 2026-2027 academic year.
Source: PropertyWire