October 2026 - Letting update for renting properties for the 2027-2028 academic period
With the Renters’ Rights Act now in place landlords, managing agents and students are navigating a different house hunting season. The information below does not constitute legal advice and is a commentary on landlords and managing agents’ different approaches (so far) to the letting season that operate within the student sector. You are always recommended to seek your own advice before deciding what approach to take.
1. Properties with 3 beds or more
Landlords who have properties with 3 beds or more are having to decide whether they want the ability to use Ground 4A in the future or not.
To successfully execute a Section 8 notice (utilising the prescribed Form 3A) under Ground 4A, the landlord must satisfy a strict, cumulative set of conditions. These include:
- the property must qualify as an HMO
- all tenants meeting the student test;
- you must have served the Ground 4A advance statement;
- the tenancy cannot have been contractually agreed upon more than 6 months in advance of the actual move-in date
- you must genuinely intend to rent the property to a new set of students that qualify.
2. So how are landlords and managing agents approaching this?
2.1 Holding deposits
A holding deposit’s principal function is to reserve accommodation while the application and pre-tenancy process are completed. A holding deposit agreement would normally be used that the applicant signs and a small fee (no more than one week’s rent) is paid.
Some landlords are then issuing Assured Periodic Tenancies (APTs) once inside the 6-month window, others are issuing them before, so students have a longer period to review and sign (these are not counter-signed until within the 6-month window). If you choose the latter, it’s important to make sure the student knows it is an offer and is subject to acceptance/countersignature by the landlord.
Holding deposits give the provider a limited right to retain the payment where:
- the applicant withdraws,
- materially misrepresents relevant information
- fails to take reasonable steps to enter into the tenancy agreement.
It does not, bind applicants or guarantee that the reservation will ‘convert’ to a tenancy agreement or tenancy.
Holding deposits may be retained only in the prescribed circumstances and must ordinarily be returned within 7 days of concluding the tenancy agreement.
However, with the payer’s consent, it may be applied against the first rent payment (or any tenancy deposit). Remember that tenancy deposits need to be protected within 30 days so if you are putting a holding deposit towards the tenancy deposit allow enough time to protect it once the holding deposit agreement comes to an end.
You will need to obtain the tenant’s consent to use the holding deposit as rent OR return the holding deposit within 7 days of the tenancy agreement.
Failure to comply with the Schedule 2 Tenant Fees Act requirements can result in enforcement action and a financial penalty of up to £5,000 for each breach.
Example wording for a holding deposit agreement is available on your Unipol landlord dashboard - it looks like this below.
2.2 Reservation (no payment)
Some landlords are reporting reserving a property for students with no fee, who will then sign a new APT once inside the 6-month window and serving Ground 4A to current tenants 4 months before they wish them to leave.
2.3 Renting in January 2027
Some landlords have decided to wait and will start advertising and renting their properties in January 2027 or once they are within the safety of the 6-month window of any future tenancies they wish to secure.
2.4 Not relying on Ground 4A
Other landlords have decided not to rely on Ground 4A in the future and are signing new tenants up immediately. Students do tend to leave at particular points in the year, but this may present future risk during the next letting season if a landlord does not have Ground 4A to rely upon.
Under Section 8 of the Housing Act 1988, a landlord can seek possession of a property only by citing specific statutory grounds, which are either mandatory or discretionary, using Form 3A. Mandatory grounds are legally stricter to prove, while discretionary grounds are easier to prove but harder to win, so each is restrictive in a different way.
3. Retaining tenants
3.1 Serving Ground 4A
Some landlords and managing agents have decided to serve Ground 4A notices (using Form 3A) on current tenants now before having conversations about whether they wish to remain in the property. Serving the notice before having the conversation is important because the Renters' Rights Act introduces penalties for misuse of possession grounds. At the point when the Ground 4A notices are served, the position should genuinely be that the existing tenancies are to end and the accommodation is required for letting to students for the next academic year.
After the notices have been served, you can consider whether any existing tenants wish to return.
Guidance for Landlords on completing a Form 3A
Guidance for Student on understanding a Form 3A
Some landlords have not allowed their current tenants to remain in the same property.
3.2 Signing a new APT for students in the same property
If landlords wish to take this approach, then please seek your own legal advice. Unipol sought legal advice and was advised that this was possible and would enable us to enter into new agreements with the same group of students to remain in the same property. But timing and process is important
3.3 Using Section 13 (s13), rent increase procedure (Form 4A)
Some landlords are allowing students to remain in the property, either deciding to maintain the current rent or using s13 to increase the rent. If students are continuing in occupation, they don’t need a new tenancy agreement or tenancy. Their existing tenancy could keep going until terminated in accordance with the Act. Ground 4A could still be used at the end of their 2nd or 3rd year and the change of rent from year to year could be dealt with under s13.
Remember tenants have the right to challenge their rent either as a new tenant (within the first 6 months of moving in) or following a rent increase notification via s13.
4. Properties with 1 or 2 beds
Landlords with smaller properties do not have the ability to use Ground 4A, students are on rolling agreements which remain in place until the tenants give notice. As stated above a landlord can seek possession of a property only by citing specific statutory grounds, which are either mandatory or discretionary, using Form 3A.
4.1 What are your options?
Some landlords are approaching their current tenants to discuss their plans. Some managing agents are approaching this by advising tenants they will need to set up new future payment plans once their current one expires (most likely this would have been set up for a fixed term). Where tenants have indicated they will be leaving, they are reminded that they will need to give at least two months’ notice once they have a set date.
Some landlords are waiting and will advertise properties as and when they’ve received notice from their tenants.
Inevitably this means that there will be a lot less 1 and 2 bed properties available to rent at the same time.
5. Conclusion
This is the first year of sweeping changes to the private rented sector and landlords and managing agents are having to find their own approaches to navigating this complex new letting environment. It is important to seek your own legal advice and decide what is best for you, your business and your tenants.