The student lettings market has been much harder hit by the Renters’ Rights Act than any other sector.

The problem is that most student contracts started in September 2025 and ran for 12 months. As a consequence of the Renters’ Rights Act, students were able to end their rental contract early this year.

The students are delighted because they can spend their rent money on a nice holiday abroad. However, this retrospective change in the terms of the contract that they signed has caused chaos for landlords and their agents.

Empty properties

Many landlords will have an empty property during the summer and no rent coming in. This will probably wipe out any profit that they expected to make for the whole of the year. If no rent is paid, then agents will not earn any fees for three months.

Few letting agents have a profit margin of more than 20%, so it means that they will make no profit this year. It really is unfair.

The problem is unlikely to happen again next year because contracts will probably start in June instead of September.

Alternatively, rents will go up by 25% to allow for the expected three month void period during the summer.

However, this poorly thought through legislation will have a long-term impact on the student lettings market.

Market exodus?

Some landlords may decide to sell up or to let their properties to professional tenants rather than students.

We are also likely to see a further increase in the amount of purpose-built student accommodation that is exempt from the new rules.

However, PBSA Accommodation is generally far more expensive than traditional student accommodation so, as so often happens, the cost of the new legislation will ultimately be paid by the tenants.

In the meantime, if you own a student lettings business, my advice would be to hold on to it for another year until the dust has settled.

Prices are down quite significantly at the moment, but letting agents will quickly find ways to mitigate the impact of the new legislation and I am confident that demand for student letting businesses – and the prices that we can achieve for them – will quickly recover.

Adam Walker is a business sales broker who has specialised in the property sector for more than 40 years.