INFORMATION AND ADVICE ON CORONAVIRUS IN STUDENT ACCOMMODATION FOR HOUSING SUPPLIERS
Although the National Codes do not cover the specifics of how to react to the Coronavirus (COVID-19) outbreak, following a number of requests, some information and advice has been put together which may be helpful. This includes an overview of how the sector is reacting to the challenges it faces and some comment on that.
Public Health England provides specific advice, including the current situation in the UK. Their advice is updated at 2.00pm each day and can be consulted at:
There are few references to accommodation issues in these letters but both letters assure the recipients that students will receive their third term student loans.
Both letters reiterate the Government’s advice is that students remaining at university in England should now stay where they are and not attempt to travel. If they are living in student halls, or private rented accommodation, they should remain there and stay indoors while current restrictions are in force.
Turning to rent the letter to Vice Chancellors says “I would like to reiterate that I trust you will continue to communicate clearly with residential students on rents for this period and administer accommodation provision in a fair manner.”
Following a number of enquiries from students and their parents about the current situation, especially whether their accommodation providers should be releasing students from their current tenancy agreements and/or returning rents, the National Codes have decided to provide some information and views on this.
In respect of the ANUK/Unipol National Code for Non-Educational Establishments this does NOT address matters relating to contractual obligations of landlords or tenants, as these are subject to statutory law. Matters relating to mis-selling or not providing contracted services can be dealt with but the Codes’ complaints procedures is unable to process complaints that relate specifically to a perceived failure by the Code member to have released tenants from their contracts at the current time.
Students who have any concerns about their existing term-time accommodation should make contact with the provider directly in the first instance. They could also get advice from their Students’ Union, which may be in a position to advocate on their behalf.
Government Advice on Providing Services and Rent Payments
On March 27th 2020 the Government, through MHCLG, issued specific advice for landlords and tenants and this included the following key statement:
There is a lot of useful information in the specialist documents including a list of urgent health and safety issues which need attention, even at this time.
This includes (but is not limited to):
If there is a problem with the fabric of the building, for example, the roof is leaking
If a boiler is broken, leaving tenants without heating or hot water
If there is a plumbing issue, meaning tenants do not have washing or toilet facilities
If white goods such as fridge or washing machine have broken, meaning tenants are unable to wash clothes or store food safely
If there is a security-critical problem, such as a broken window or external door
If equipment a disabled person relies on requires installation or repair.
There are areas where repairs ought to be carried out and, in the case of difficulties, this guidance should be drawn to the attention of contractors to explain their obligations to clients.
In the MHCLG Guidance, which is issued across the whole rented sector it says:
“Tenants are still liable for their rent and should pay this as usual. If they face financial hardship and struggle to pay this, support is available. In the first instance they should speak to their landlord if they think they will have difficulty meeting a rental payment, and in this unique context we would encourage tenants and landlords to work together to put in place a rent payment scheme.”
This fails to address the issue of students returning home and not requiring accommodation and much of the help flagged is not available to students.
Difficulties in Providing Services
The National Codes understand the difficulties (for both tenants and staff) in maintaining buildings and providing services at this time and will take a common-sense approach to responding to any complaints in this area.
Particular difficulties have been flagged in two areas:
Many student staff (often know as Residents Assistants) who operate reception and other facilities have returned home placing a greater burden on full time staff.
There have been several reported instances of student parties having to be broken up with a number of students failing to follow social distancing advice. There is evidence that compliance with social distancing is increasing but this still remain an operational problem in some accommodation and is causing unnecessary risk to staff.
What Has Been Going On - University Responses to Third Term Rents
As universities closed their teaching buildings and libraries their initial response was to tell students that rent was payable as normal. The National Union of Students pressed strongly for rent payments to be halted for the third term, and continue to do so. Several universities decided that they would either waive future payments or refund rents. The first was Newcastle University and that was quickly followed by Essex University and the University of Manchester. Although this is a moving situation the NCA is aware of the following universities giving a rent waiver, a refund or more flexible terms (in no particular order):
Manchester Metropolitan University
Queens University Belfast
Bath Spa University
University of Sheffield
University of Leeds
Queen Mary University of London
University of Edinburgh
Leeds Beckett University
Nottingham Trent University
University of Reading
University of Northumbria
Queen Mary College London
University of Exeter
University of Glasgow
University of Leicester
University of Kent
University of Cardiff
Cardiff Metropolitan University
University of Coventry
University of Warwick
Southampton Solent University
The reaction from universities has not been uniform. Almost all have had different approaches. Some universities offering to stop students paying rent at the beginning of April if they left by a given date were criticised when movement became difficult. There is significant evidence that many home students, in leaving their accommodation, planned to do so only temporarily and as many as 70% of undergraduate nominated rooms may still have possessions in them.
The “you are either here or you are not” approach may not be helpful and, more recently, universities have been offering waivers and discounts even if students are not away.
Where universities have waived their rents on their own and nominated accommodation they are urging the private sector to do the same. The approach varies but two letters may be of interest, one from Reading and one from Nottingham Trent University:
There are significant differences between University allocated accommodation, which houses mainly first year students and other private sector halls and housing which often house many more returning students (often living in groups) or postgraduates. The evidence is that in these buildings occupancy remains significantly higher than in allocated halls.
In halls specialising in international students, often postgraduates, occupancy remains high and there are probably more students present now than there would be across a normal Easter period.
Student accommodation providers are very different from universities: their only income comes from rents whereas in a University accommodation is not the main business and most universities are keen to stress that on-line teaching, resources and assessment continues and they continue to receive their main source of income in the form of academic fees.
What Have PBSA Providers Being Doing?
The first big development was on 24th March 2020 with Unite announcing that if students did not plan to continue staying in their Unite home for the third University term (so from after Easter), then provided Unite were informed on this by Friday 10th April 2020, they would treat this as a surrender of tenancy and students would not have to pay the outstanding rental payment.
The NCA wrote to all National Code members asking them for what they were doing and their thoughts. A large number of responses were received and can be summarised as an overall feeling of a real sense of frustration from the sector, this seems to be coming from these 3 areas:
Government not giving proper assistance and guidance to those providing student accommodation or recognising their role as “key workers” in order to keep halls open and manage self isolation
Universities giving mixed messaging to students and not speaking with the providers on joint communication and actions
Unite’s actions has increased pressure in the sector for others to do the same but many providers cannot follow this without placing their business in, at best, serious financial difficulties.
There is also a real sense of insecurity about what is happening to the next academic year (2020-2021) and what implications that might have for rental revenue and that insecurity is making many providers think more carefully about their cash position this academic year. The more security there is about next year, the more flexibility that is likely to be shown in 2019-2020.
Out of 115 recipients as of 30th March 2020 only 7 suppliers had agreed rent refunds. Many are dealing with hardship on a case by case basis and several are establishing a hardship fund (as the University of York has also done). Many are looking at deferred rent payments and payment plans.
The large property managers can only reflect their clients’ position and some have refunded rents and others have not. Most are awaiting decisions from their funders.
Many providers report a significant number of students cancelling payments and expect a high default rate as the next rental payment becomes due.
If Unipol was putting together advice it would be based on a “sharing of pain” assumption. This was not a foreseeable set of circumstances: no one will be insured for this or would have had it on their risk register. Suppliers are understand nervous about what will happen to the next academic year because if that failed then insolvency, without help, would loom for many. Also, important to remember that for many landlords in off-street housing, this is their only asset and pension so important not to batch them together with unscrupulous money-grabbing landlords.
The universities mainly have deep (or deeper) pockets and the larger PBSA suppliers will take the hit. The smaller suppliers, Unipol included, will need to have a more measured position. The key is to explain what is being proposed to students in a transparent and open manner and to convince both landlords and students:
this is no one’s fault
everyone is in some difficulties
people need to make compromises based on a fair approach.
Providers will have to come up with a package of measures that are seen to approach the situation fairly. Everyone: institutions, students, parents and landlords will have to share the pain - getting that sharing formula right will be the challenge for the sector.
Unipol’s own advice to its tenants is on open access and is regularly updated and can be seen here.
Unipol’s Board will take our decisions on Friday 3rd April 2020 and those decisions will be on that website address later that day.
Big Issues for Private Student Accommodation Providers
The National Code is working closely with The British Property Federation on these matters and the issues can be summarised as:
student rent waivers have serious financial implications for the sector and for many providers the financial constraints do not make full waivers viable. DfE are currently feeding-in to HMT on this and other impacts for their consideration of how the sector might be supported.
there are concerns that those that do offer waivers will be hit with a heavy council tax bill on their empty rooms. If the government wished to support those offering waivers an instruction to councils not to charge providers council tax would be helpful. This assurance has already been granted by the Scottish Government. DfE agreed that as local authorities do not currently levy council tax revenue from rooms in occupation by students this reassurance has no cost and is worth consideration.
Key workers status should be clearer. Universities could be encouraged by Government to include the staff critical for private providers looking after their students too.
Many new buildings are being affected by the delays inherent in the current lockdown which is affecting the organisation of work on site, the number of workers being employed and problems in supply chains.
Much work on developing new buildings has stopped and so there will be a pipeline delay in about 2-3 years.
These delays, once the current problems are over, will result in accommodation shortages being experienced in certain key locations. In others, the market will cool providing a useful time for reflection on over-development.
The National Code proposals for late buildings that are still subject to consultation would not have come into effect for the 2020-2021 academic year but are planned to effect summer 2021. In the event that the 2020-2021 academic year is disrupted they will be postponed for a further year.