Student landlord advice and effective tips to prevent deposit disputes

It is predicted that the UK will face a shortage of around 450,000 student beds by 2025 due to the upcoming changes to student lets outlined in the Renters Reform Bill. Despite the increasing number of students attending universities, the supply of new student accommodations may decrease. While this situation is uncertain, it presents a significant opportunity for landlords in the student housing market.

Being a student landlord in the UK can be a rewarding venture. Of course, as with any rental experience, it will come with its own set of challenges; from understanding the legal requirements, choosing the right students for your property, and ensuring your property is well-maintained, there's a lot to consider.

In this article, the Tenancy Deposit Scheme provides practical tips and advice to help you navigate the student rental market with ease.

Understanding licensing requirements

If you own a property where three or more students live together, it's considered a House in Multiple Occupation (HMO). HMO landlords have additional legal obligations, and some may also require a licence. Failing to comply with these rules can result in significant financial penalties. To find out whether you need a licence, check with your council.

TDS Tip: If you’re registered as an HMO, there are minimum room sizes to be aware of. Single-occupancy rooms must have a minimum floor area of 6.51 sq metres, and double occupancy are 10.22 square metre minimum. Any part of the room with a ceiling height of less than 1.5m is not included within the measurement.

Build a solid relationship with your student tenants

Communication is key when renting to students! Many students are renting privately for the first time, so they might not be familiar with their responsibilities as tenants. Take the time to explain the ins and outs of their tenancy agreement, and it's also a good idea to remind them of who to contact if any repairs are needed during their tenancy. Make sure they understand the procedure for any emergencies, and that you should give them 24 hours’ notice before entering the property.

TDS Tip: Provide a welcome pack: Consider giving your new tenants a welcome pack that outlines important details of their tenancy. This could include information about the rent, deposits, and any rules specific to your property. The welcome pack can serve as a helpful reference for your tenants throughout their stay.

Understanding council tax exemptions

Properties occupied entirely by students are exempt from council tax. However, this exemption only lasts as long as all the tenants in the property qualify as students. For instance, if you have a HMO with five occupants, and one tenant is a working professional while the rest are students, your property won't qualify for the council tax exemption.

Furnishing your property

Most students prefer furnished properties, as most do not own much furniture, it would be wise to supply the property well-furnished. When furnishing your property, invest in durable, long-lasting furniture. This should include white goods, beds, wardrobes, sofas, curtains, lamps, vacuum cleaners, bins and desks and chairs for each room. Consider communal areas too like a TV or storage units.

Factor in maintenance and wear and tear

Student lets have a higher turnover of tenants than your standard tenancies, and a larger number of people in the property, so remember to consider fair wear and tear. Therefore, budgeting for higher maintenance costs and having a contingency fund for unexpected repairs or replacements is important. 

The Tenancy Deposit Scheme reports that landlords often seek to replace an item and forget to factor in fair wear and tear when deducting from the deposit, as opposed to making good or repair of an item, so when a claim is submitted, it's more likely to result in a lesser award or be found in favour of the tenants. Our adjudicators check to see if the agent or landlord has tried to repair damaged items before claiming a replacement cost, avoiding leaving the agent or landlord in a position of betterment. 

TDS Tip: The repair cost is usually lower than for replacement, so the tenants are more likely to agree when you’re not asking for costs for a full replacement.

Changing locks

It's good practice to change the locks on your property at the start of each tenancy. This ensures the security of your property and the safety of your tenants. In HMO, each bedroom door must be fitted with a thumb-turn lock, and tenants should be able to lock their doors from inside their rooms.

TDS Tip: As most students won’t be living in the accommodation for the entire year, ensure your insurance policy covers periods where the property is empty and voids between tenancies.

Reduce the chances of a deposit dispute

Many landlords have experienced costly delays, stress, and extra administration time due to deposit disputes. Here are a few pointers from the Tenancy Deposit Scheme to help you avoid such disputes at the end of a tenancy.

• Before finalising a tenancy agreement, perform reference checks on all tenants, or request a reference from the university or student housing provider if they are coming straight from residence halls.
• A parent or other adult family member can serve as a guarantor. This will ensure that any owed monies are repaid even if the student cannot do so.
• Perform a check-in inventory. Prior to your students moving in, ensure you have a detailed inventory setting out a thorough description of the condition of each and all your fixtures, fittings, contents, and décor, and the standard of cleanliness of the property. 
• Include dated and labelled photos of each item in the inventory. Have all your tenants sign this inventory at check-in.
• Provide a move-in pack that describes where things are, how to use appliances, the signed inventory, and how to avoid causing damage. 
• Give clear directions so there is no doubt about what is and what is not allowed, such as avoiding driving nails into the walls or keeping the garden tidy.
• Include the right clauses in a tenancy agreement so that deposit deductions can be negotiated if necessary.
• Keep an open channel of communication! It’s important to ask if the students require anything, as this may be their first time living independently. You may find that you need to give more pointers and provide more assistance than you would with seasoned tenants.
• Conduct regular inspections and write them into your tenancy agreement.
• Perform a check-out inventory. Remind tenants to review the inventory and return the property in the same condition and to the same standard of cleanliness as it was at the start.

Registering your deposits with the Tenancy Deposit Scheme

Deposit protection with the Tenancy Deposit Scheme not only provides protection for the deposit but also helps resolve any disputes that may arise at the end of the tenancy, and free mediation with TDS Resolution for any mid-tenancy disputes, such as rent arrears or breach of contract. 

By joining the Tenancy Deposit Scheme, you'll unlock the ultimate toolkit with templates, tools, and our comprehensive deposit protection management dashboard. 

Signing up is a breeze, plus NRLA members enjoy a special discount on TDS Insured.

Please note that some resources are exclusively accessible for landlords who use the free custodial deposit protection scheme (TDS Custodial Scheme) or the insured deposit protection scheme (TDS Insured Scheme).