Thousands of UK students caught in rent trap by private landlords | Student finance

Notttingham Trent University students Eleanora Brown and her boyfriend Nizar Ruiz are in lockdown at home in Norwich, with no prospect of returning to campus any time soon. The teaching buildings are closed and the university has released all of its tenants from paying rent this term. Yet their hall of residence, run by Collegiate, a private developer, is demanding £1,700 from each of its residents to cover the summer term.

While students at most university-owned accommodation do not have to pay rent for the third term, Brown and Ruiz are among thousands of students trapped in expensive contracts with private hall operators.

Brown’s father, Russell, says: “As Eleanora is in lockdown at our family home and will not be returning to NTU for lessons, she asked if Collegiate would cancel her tenancy contract for the final term. It has refused to do this.

“We think it morally corrupt that the government, through Student Finance England, loans Eleanora money which she has to pay to Collegiate and top up with her own money for accommodation she is no longer living in, and for facilities that are no longer available to her. She has to repay her student loan while Collegiate and the building owners (whoever that may be) get to keep the profits.”

Collegiate says its halls have remained open, and it has offered to let all students defer their next rent payment until August. It says NTU has not cancelled teaching “rather changed from face-to-face to online … all their students’ education is continuing as is all financial support in terms of loans and grants”.

Steve Denton, the NTU chief operating officer, says: “We urge Collegiate to reconsider their position. Students are staying away to respect government advice. They should not be penalised financially for being responsible citizens.”

It’s not just Collegiate that is still sending rent demands to students. Last week Emily Smith received a bill for £1,287 from The Apollo Works, her hall of residence at Coventry University (operated by a company called Host) to cover the third term of this academic year. Yet Coventry shut its campus in March, Smith has been at home in Hertfordshire since then, and the hall of residence is, she says, virtually empty.

Host operates 12,000 student beds in 22 cities across the UK and Ireland, but has no single policy on early cancellation. In Plymouth, it operates six student halls of residence, and has allowed students at four to terminate their contracts early. But that is not an option at its two other blocks in the city.

It’s a mixed picture across privately owned halls. The good news is that Unite, the biggest private provider of student accommodation, has agreed to let students surrender tenancy agreements and is giving refunds to those who paid in advance. But Fresh Student Living has warned its 18,000 tenants that they may not be released early from their contracts.

More than 1,600 students have signed a petition against Fresh, which says: “It is categorically unfair and greedy to charge students for rent if they are unable to live in their accommodation.”

Fresh says it only operates the buildings and is not the underlying owner. In those owned by its parent company, Watkin Jones, students who have left can claim a credit for the final rent instalment. It adds: “A number of owners have agreed to offer credits or refunds to students. Unfortunately, not all owners have been able to agree some form of refund.”

Some of the landlords refusing to cancel rents are based in offshore tax havens.

At Host’s Apollo Works in Coventry, where Smith rents, the landlord named on her contract is not Host but two firms called BR Student Housing Nominee 1 Ltd and BR Student Housing Nominee 2 Ltd. These are based in Jersey, with documents naming shareholders as BlackRock (Channel Islands) and BNP Paribas (Jersey). Both are giant international investment companies, with BlackRock controlling assets worth more than $7tn (£5.64tn).

Smith is not alone in her anger. A petition, “Make Black Rock Release Students from Rent”, says: “Students are vulnerable targets of private companies who want to make a financial gain, especially in this particularly hard time. This has affected tenants of not only Apollo Works, Coventry, but also Hope Street Apartments, Liverpool, The Old Dairy, Plymouth and Frobisher House, Plymouth. All of which are under the same landlord, BR Student Housing Unit Trust.”

Host says: “Decisions on the cancellation policies of contracts are outside of our control and made by the individual building owners. In respect of The Apollo Works, we have been advised by the building’s owner that it will not be possible to terminate the contracts of those residents who have decided to leave their accommodation.”

But halls of residence make up only a part of the student rental market, catering mostly for first-year students. The larger rental market is second and third-year students who move out of halls. Many are also finding that while their university has closed, their landlords are still demanding full rents.

Ruth Day, a third-year maths and philosophy student at Bristol University, faces a £1,320 rent bill for her final term even though she has vacated the property.

“All of us are in a tight money spot right now, be that because we’ve lost jobs or because of the uncertainty of when we’ll next get money and it seems unreasonable that our landlord, who appears to be very wealthy, is so unsympathetic to our situation,” she says.

She has decided to join a rent strike with 130 other students in Bristol, with a campaign targeting local lettings agency, Digs. It is just one of a wave of rent strikes by students across the UK.

Digs says it has suggested to all of its landlords a number of ways in which they could support tenants who were finding it difficult to pay their rent. “Many landlords have released tenants early, some have offered zero rent, some have offered half rent, some have agreed other arrangements,” it says. “Some, usually those who heavily rely on the rent, are still requesting full rent as is their legal right.”

Legal experts say whether or not students must continue to pay rent during the lockdown will depend on the type of accommodation and their tenancy agreement.

Daniel Fitzpatrick, a housing partner at law firm Hodge Jones & Allen Solicitors told Guardian Education that students could try arguing that the contract has been frustrated by the Covid-19 outbreak. There may also be a break clause allowing them to terminate the contract before the end of the fixed term after providing the required notice.

But students are generally advised to negotiate with their landlord immediately, as the obligation to pay rent will continue in accordance with their contract, and they could remain liable for any rent due up to the expiry of the notice period.

Also worth considering is what happens in September when the new academic year begins. Should students and their parents be locking themselves into 12-month rental contracts to secure accommodation for the year ahead, when there is a possibility that campuses may not physically reopen this year?

The National Union of Students vice-president (welfare), Eva Crossan Jory, says: “Most students start looking for second and third year accommodation over the summer, with some even asked to pay holding fees, which we are against.

“But there is no government guidance about what will be happening in September or what happens if universities say you can’t come back to campus for the first term.

“We are looking for much better public health guidance about whether it’s going to be possible for millions of students to criss-cross the country in September.”