Renting to students: what landlords need to know

Our guide to student lettings runs through what landlords need to know for renting to students, from council tax to HMO rules and landlord insurance.

The new academic year is almost upon us, and if you’re about to hand your buy-to-let keys over to a group of students, you may be on to a good thing.

Student rentals can bring high returns, especially if your property is located one of the university towns with the best yields.

But there are a few things to consider when it comes to student lettings, and if you haven’t sorted them all out yet, now’s the time. Check through our list to make sure you’ve done everything you need to do to keep your student rental property above board.

Tenancy agreement

You and your tenants should sign a tenancy agreement that sets out the terms and conditions of the rental. Most student landlords opt for a joint tenancy, which means all the students in the house sign the same tenancy agreement, and are all responsible for costs. Therefore if one of your tenants fails to pay their rent, the other tenants (or their guarantors) can be held liable. If one tenant leaves before the tenancy is up, it’ll usually be down to the remaining students to find a replacement, and a new tenancy agreement will then need to be signed. Make sure your tenants are clear about this before they move in.

If you’re renting out each bedroom individually rather than renting the whole property to a group of friends, you may get your tenants to sign individual tenancy agreements instead.

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HMOs (houses in multiple occupation)

Most student houses are ‘houses in multiple occupation’ (HMO), which is the term for a property occupied by at least three people who are not from the same household. And if your property is at least three storeys high and you rent to more than five people who aren’t from the same household (and who share facilities like a kitchen or a bathroom) it counts as a ‘large HMO’ and you need a licence from your local council. You’ll need to show your property meets certain standards to get your HMO licence.

Some local councils require smaller HMOs to have licences too, so check with them to find out. It can take a couple of months to get your HMO licence, so if you need one for this academic year hopefully your application is already underway.

Council tax

Students are exempt from council tax, but they’ll need to get an exemption certificate from the council, which often involves providing proof of their student status from their university. Bear in mind that if at a later date you’re unable to prove that your property was occupied solely by students, you may be liable to pay the outstanding council tax.

Insurance

When you’re buying your landlord insurance you need to tell the insurer that you’re renting to students. If you’ve already got a landlord insurance policy but this is the first time you’re renting to students, you need to contact your insurer to amend your policy, or you may need to buy a new policy. This is important because if your insurer doesn’t have accurate information then you may not be covered when you come to make a claim.

You can cover the structure of your property with landlord buildings insurance and any furniture and fittings you provide to your tenants can be protected with landlord contents insurance.

However, this insurance can only cover things that belong to you: remind your tenants that if they want to cover their own belongings (for example their computers) they will need to take out their own contents insurance policies.

Furnishings

Since most students don’t have much furniture of their own, it’s likely you’ll be renting your property furnished. Make sure everything’s ready for your students to move in, including beds, chairs, tables and white goods in the kitchen. Leave the instruction manuals in an obvious place and take a full inventory of the items in the property and their condition, signed by you and your tenants.

If there are things in the house that any one of the tenants may need to gain access to (for example the broadband router, thermostat, hot water controls, fuse boxes) these should be located in a communal space.

Antisocial behaviour

You’re responsible for trying to stop your tenants acting in an antisocial way in and around your property. This means that if the students are doing something that’s annoying the neighbours or causing trouble in the local area – having loud parties or leaving rubbish piling up outside the house, for example – you have a duty to speak to them. If the antisocial behaviour continues, the council may step in.

The students’ university may be able to help you deal with antisocial behaviour, and it’s always a good idea to have regular contact with your tenants so that you can deal with any issues swiftly.

Other landlord responsibilities

When you’re renting to students, all the other normal landlord responsibilities apply, including gas safety and fire safety regulations and deposit protection rules. Also remember that, under right to rent rules, you’re obliged to check the immigration status of your tenants by asking for documents like passports or visas.

Word-of-mouth

If you provide a nice space for your students to live in, you have a good relationship with them and you deal with their issues promptly, you should find that your property easily fills for future academic years as you get a good reputation in the student community. Your tenants are likely to recommend your property to students in the years below them who are searching for somewhere to live, and this word-of-mouth marketing could save you money on letting agency fees.

This article is for information only and is not legal advice. If you need specific help with your buy-to-let property, please speak to a professional.

If you're renting to students, how has the experience been so far? Tell us in the comments.