A guide to student tenancy agreement law

Branching out into the student rental market can be an exciting time for landlords, but they must make sure they understand the student tenancy agreement law, as it differs slightly from standard Assured Shorthold Tenancies.

If your property is located near a university, student accommodation is definitely worth considering because it can be very lucrative. Students typically pay higher rent than other tenants, so you can expect to enjoy a gross yield of up to 9% in certain areas, compared to standard buy-to-let properties, at around 4.5-5.5%. 

The turnover might be higher, but with 2.9 million students at UK higher education institutions in 2023/24, it shouldn’t be too difficult to find more tenants if the location is right.

But to maximise the potential profits, you will need robust student tenancy agreements as legal costs can be high. This guide will provide a breakdown of the legal considerations for landlords letting to students. It will cover key clauses to include in student tenancy agreements, guarantor requirements and common issues that come with renting to students.

Student tenancy agreements vs. Standard Assured Shorthold Tenancies

Student tenancy agreements are still similar to the standard tenancy agreement. It’s still a legal contract between the landlord and the tenant, outlining the rights and responsibilities of each party. A well-drafted, highly detailed tenancy agreement remains a priority for student lets.

Students generally have a shorter tenancy agreement length, which matches the academic year.  It’s usually a fixed-term agreement. There isn’t a specific student tenancy agreement law in the UK. They are generally covered by the same tenancy laws as other private renters.

Including specific clauses can protect landlords from common issues while fostering a positive landlord-tenant relationship. Key clauses to consider include:

• Rent payment terms
• Deposit protection
• Gurantor clauses (more below)
• Maintenance responsibilities
• Noise and conduct rules
• Early termination conditions

Guarantor requirements

Having a guarantor is not a legal requirement, but it is very common and highly recommended. It will protect the landlord should there be any issues with rent payments. This can then form part of the student tenancy agreement.  

The guarantor will pay the rent if the student can’t, so it drastically reduces the financial risk. It is usually a parent or guardian who is financially stable and UK-based.

Types of student tenancy agreements

There are two different types of student tenancy agreements for a landlord to choose from. Landlords will need to assess their own property type to work out which is better suited to their circumstances. It’s also worth double-checking with tenants during the student tenant screening process. The two types are listed below.

Individual student tenancy agreements

Under this agreement, the tenant is only responsible for their own deposit, payment and actions within the property. This type is recommended if your property has multiple bedrooms and is essentially a HMO. 

Joint student tenancy agreements

Under this agreement, all tenants share joint responsibility for the deposit, payment and actions. This method gives the landlord greater security because if one of the students can’t make the payment, all other students in the building are responsible for making up the difference. In other words, it all comes from one pot.

Break clauses for student tenancy agreements

There is no student tenancy agreement law which forces landlords to include a break clause in the agreement with students. Some landlords decide to use a break clause, which will give both the landlord and the tenant the option to end the student tenancy agreement early. This can give both parties flexibility.

However, some student landlords might be reluctant to implement a break clause because it might put students off joining. It also means that if either party activates the break clause, the landlord will be left with a void period, and it’s hard to get students in the property once the academic year has started, as most students already have accommodation sorted for the year.

Common issues with student lets

Renting out to students can be attractive, but there are some drawbacks which put landlords off. Like any investment, there are always risks. Here are some things to be aware of when renting out to students. 

• The property is at greater risk of damage because it’s likely the student’s first experience of living away from parents 
• The property is more likely to require extra professional cleaning at the end of the tenancy
• Issues with neighbours, such as noise levels
• If you have a break clause and the students decide on an early termination, this could create a rather large void period
• The property is often empty when the students are not at university

Student landlord insurance can mitigate some of the risks. It is sensible to be cautious and cover your back with specialist student landlord insurance, just in case any damage occurs.

We have the expertise to find the best landlord insurance deals that are suitable for your needs as a landlord. Contact us today at 01788 818 670 for a quote, and don’t forget to visit our resource centre for more information on how to be a successful landlord.