Student digs Renters’ Rights exemption set to boost development
A proposed amendment to the Renters’ Rights Bill discussed in the House of Lords this week could deliver significant relief to developers and operators of purpose-built student accommodation, by removing code-compliant schemes from the financial and administrative burdens of local authority licensing.
The amendment, introduced by Lord Best, would formally exempt PBSA providers that adhere to government-approved codes, such as the Unipol/ANUK National Codes, from local licensing regimes. It follows a 2019 Government-commissioned review which found that licensing added minimal value in the PBSA context, where national codes already impose stringent standards on safety, management and service delivery.
The British Property Federation (BPF)has welcomed the amendment as a move that could unlock stalled development and reduce costs. Kate Butler, senior policy officer at the BPF, said: “Licensing has been unnecessary in the PBSA sector for years, given the higher standards enforced by the government-approved Unipol/ANUK Codes. These codes ensure well-managed, high-quality accommodation for students, in excess of what licensing schemes can achieve. The new clause aims to codify that finding into legislation.”
A proposed amendment to the Renters’ Rights Bill discussed in the House of Lords this week could deliver significant relief to developers and operators of purpose-built student accommodation, by removing code-compliant schemes from the financial and administrative burdens of local authority licensing.
The amendment, introduced by Lord Best, would formally exempt PBSA providers that adhere to government-approved codes, such as the Unipol/ANUK National Codes, from local licensing regimes. It follows a 2019 Government-commissioned review which found that licensing added minimal value in the PBSA context, where national codes already impose stringent standards on safety, management and service delivery.
The British Property Federation (BPF)has welcomed the amendment as a move that could unlock stalled development and reduce costs. Kate Butler, senior policy officer at the BPF, said: “Licensing has been unnecessary in the PBSA sector for years, given the higher standards enforced by the government-approved Unipol/ANUK Codes. These codes ensure well-managed, high-quality accommodation for students, in excess of what licensing schemes can achieve. The new clause aims to codify that finding into legislation.”
Sliver of light
According to industry sources, the potential financial benefit of the exemption is substantial. The BPF estimates that removing licensing could save PBSA providers hundreds of thousands of pounds per scheme, aiding the viability of new developments at a time of acute housing undersupply in university towns.
Marc Eden, investment director at Regal, welcomed the proposal but placed it in the context of broader investor concerns. “The proposed amendment to the Renters’ Rights Bill is a welcome and sensible move and is reassuring proof that practical thinking still has a place in policy,” Eden said. “However, this is a sliver of light in an otherwise very uncertain real estate landscape. The ongoing opaqueness around the Building Safety Regulator process continues to seriously impact investor confidence, housing delivery and market stability. The stark fact is that the government will not achieve their housing targets whilst this chronic situation persists.”
From the perspective of developers and institutional investors, the reform is seen as both necessary and overdue. Tom Donnachie, managing director of UK investment at Amro, echoed Eden’s view, stating the current licensing regime “has become an expensive box-ticking exercise” that stalls investment and delivers little added value.
Donnachie added: “Let’s be clear, the PBSA sector is already subject to rigorous national codes that govern everything from safety standards to management practices. Local licensing, where applied to code-compliant schemes, has largely duplicated these protections while adding significant costs sometimes running into hundreds of thousands of pounds per scheme. That’s money which could, and should, be going into building more student homes, not into bureaucracy.”
The amendment, Donnachie said, shows that policymakers finally recognise the difference between professionally managed PBSA and the broader, “more fragmented” private student rental sector. “It reflects the reality that PBSA operates to far higher standards than much of the market and shouldn’t be penalised for it,” he added. “In terms of investor sentiment, the impact could be significant. International and institutional capital is watching closely, and one of the biggest concerns is unpredictable or inconsistent regulation. Removing unnecessary barriers like licensing not only improves scheme viability but helps restore confidence that the UK remains a safe and sensible place to invest in student accommodation.”
Easing pressure
The proposed change aligns closely with the strategic priorities of major investors such as Legal & General, which formed a £500m platform to acquire operational purpose-built student accommodation assets in April 2024.
L&G Student Living Platform will deploy £500m over the next two years, with the longer-term goal of growing the portfolio to more than £1bn and directly managing 5,000 beds across the UK.
Adam Burney, head of annuity BTR and PBSA at Legal & General, said: “Exempting PBSA from local authority licensing will reduce administrative and financial burdens, enhancing project viability and student services, providing greater certainty for investors. Further consideration could also be given to flexibility of tenancies, aligned with academic terms, a distinction from the wider residential market.”
For long-term operators, the proposed exemption represents a signal of regulatory alignment with the realities of the sector.
James Hunt, global head of real estate at operator Global Student Accommodation, said: “A pragmatic and sensible approach to the regulatory framework around student housing is always welcomed by investors, who continue to navigate challenges of viability. Reducing barriers to investment will encourage greater provision of PBSA, supply of which has continued to materially lag year on year.
“Consequently, exemption of PBSA from the Renters’ Rights Bill will help promote the provision of much needed safe, secure, and professionally managed student accommodation in the UK.”
Beyond the sector itself, Alex Pease, chief executive of Watkin Jones, underscored the potential knock-on effect of increased PBSA supply on the broader housing market. “Strengthening support for this sector not only enhances student housing but also helps ease pressure on the wider housing market by freeing up traditional homes. At a time when the sector faces ongoing challenges, this change would offer greater stability and long-term benefit.”
What would it mean for the sector if PBSA is not exempt?
The Renters’ Rights Bill mostly targets private rental homes, whereas PBSA comprises student halls and privately run student apartment blocks. The two differ because PBSA already uses short, fixed-term contracts, usually nine-12 months aligned with the academic year. Students want these fixed terms so they know their housing is secured for the school year.
Under the current draft of the Renters’ Rights Bill, all private rented homes would move to open-ended periodic tenancies, meaning no fixed end date, and tenants would be able to leave with nine months’ notice. Under the current draft of the bill, in which PBSA is not made exempt, students could theoretically book a room in PBSA for the school year but leave halfway through without paying the full rent.
Additionally, student housing operators wouldn’t know how many rooms are occupied or available. Universities and providers couldn’t plan for new student intakes properly. The end result would lead to making student accommodation chaotic and expensive, ironically harming students.
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