Summer isn’t quite with usyet but the COVID-19 outlook is certainly sunnier than it’s been at any time in the last twelve months. With the Scottish Government announcing plans for a route out of lockdown - non-essential businesses set to start re-opening at the close of April and local travel restrictions set to ease from there also - many of us are finally letting ourselves hope for a staycation this summer, or at the very least a trip to a local beer garden with a friend or two!
For our student population who haven’t had any sense of enjoyment out of our fabulous city in the last year, there’s suddenly better prospects for employment, entertainment and activity on the horizon. It’s perhaps unsurprising then that we’ve seen a spike in enquiries from those looking to rent a House of Multiple Occupancy student home from summer 2021.
There’s generally hot competition to secure an HMO property in the city centre, and this year that might be compounded by the numbers of young professionals that we’ve observed in the last six months moving into HMO properties for the social benefits of being in a larger household through lockdown. Now is the time to act if you are interested in a property for the summer or your next academic term.
Here’s some key information to help those in the market find a student home who are embarking on their first foray into the Private Rented Sector in Edinburgh.
What is an HMO and does my potential new home need one?
If you want to live as a group of three or more unrelated persons then the properties you apply for will have to carry an HMO license. This means it will carry a higher safety compliance burden than a regular private let and also adhere to certain spatial/amenity requirements.
HMOs carry a license to be let to a set maximum number of occupants, usually in conjunction with the number of available bedrooms. A couple or immediate relatives (such as siblings, parents/children) count as one unit under the license terms, however, just because a property has an HMO license for three does not necessarily mean that a couple and two single persons can share a three bed HMO. If you wish to let a property on this basis, discuss this in advance with the agent or landlord as the requirements for food preparation, sanitation, common space and bedroom sizes differ based on the number of overall sharers to prevent over occupancy. This type of application may be less favourable than others due to the increased wear and tear on the property than one with fewer proposed occupants.
When will HMO properties become available?
This year COVID-19 caused some students to take the decision to leave the city earlier than is usual. As such, some of our available HMOs are on the market available now. We have received some notices from our tenants indicating they will vacate between early April and late June. Please note the available date on the property you are applying for carefully. Generally, applications are only accepted where the proposed lease start date is within four weeks of the available date. Landlords tend to select notes of interest that are closest to the availability date.
Under the current tenancy regime in Scotland, tenants only have to provide twenty-eight days’ notice to leave, therefore properties with available dates later in the summer are not likely to become available till much later in the year. With the bulk of student home tenancies since the inception of the Private Residential Tenancy (PRT) ending in April-May over the last few years, there are always more properties available for June entry than for August-September. The properties becoming available later in the summer tend to be new properties to the rental market and are always in hot demand, particularly from overseas students newly arriving to the city in time for the next academic session.
Will I be able to view a property in person?
Under our present industry guidance, we are only supposed to arrange viewings for applicants who have an active application in progress. To best fit with the ethos of the current lockdown, we are not presently conducting physical viewings in tenanted properties although we can arrange socially distanced viewings for our empty properties.
If we presently have a virtual tour available we will share this with interested parties and invite notes of interest. If we cannot yet share a virtual tour, we will waitlist interested parties and send a viewing link as soon as possible. We hope to be able to obtain virtual tours for all properties once the restrictions change on 26th April.
On the back of a successful application, we will endeavour to invite applicants to view properties once vacant and before their move in date, so long as contemporary guidance permits.
Can professionals and students share an HMO property?
Yes, however it is worth noting that while a student home (fully occupied by students) will be exempt from council tax, if a professional is residing in a property they will carry responsibility for a full council tax bill. The maximum discount available in such circumstances is 25% irrespective of how many students are resident at the address.
What is the process for securing a property?
Whether you are looking to move into a one bed or a six bedroom property, after receiving a virtual tour, the application starts with the completion of a Note of Interest form which provides the landlord with some information about the proposed applicants, their financial standing (or that of their guarantor as applicable) and the proposed entry dates. In some circumstances we may ask what year of study you’ll be going into. HMO properties that have faced previous neighbour complaints or objections to the HMO license may be restricted in the types of groups of applicants that can be accepted.
Once the landlord has selected their preferred applicants to proceed with, we will let all parties know and invite the preferred applicants and their guarantors to enter referencing. At this stage we ask the applicants to pay £100 each toward their eventual deposit for the property as a gesture of commitment. This is refundable in the event that the tenancy does not proceed. Once referencing is complete, you will be issued a digital lease for completion.
What are the requirements for a guarantor?
As student tenants do not tend to have what is deemed as ‘secure income’ beyond part time employment, it’s common for students to need someone to act as guarantor for the tenancy. Guarantors should be a UK resident with sufficient income from employment/pension/business income to prove that the share of rent they are covering over a year is not more than 20% of their gross annual income.
All PRT tenancies in Scotland carry joint and several liability. You should highlight this to your guarantor before you apply to ensure they are happy to proceed on this basis.
In the absence of a suitable guarantor, some landlords will be amenable to an application based on a six month share of rent being paid in advance, thereafter moving back to a monthly direct debit.
What does ‘joint and several liability’ mean?
In Scotland, all tenants, and by extension any guarantors, are considered joint and severally liable under their lease. This means that every tenant and every guarantor is liable for all terms and conditions of the lease in full, including rent, deposit, responsibility to care for the property etc. We understand that joint tenants will generally pay equal shares of rent, however, every tenant (and guarantor) holds responsibility for ensuring the full value of rent is paid. Therefore, if an expected share of rent is not paid by the party we expect to collect from by direct debit, we contact that individual and then if the rent arrears continue, we will approach their guarantor, their co-tenants and then the wider group of guarantors. This is a very rare occurrence.
In the event of a First Tier Tribunal awarding a decree for unpaid rent to a landlord, while yes, each guarantor is held responsible for the full arrears, all other guarantors and tenants will share in the same judgement. In all my years in property management, I have never seen this come to pass for a student home.
Many guarantors hold concerns about being liable for a much larger rent than just their tenant’s share. There is no way around this in Scotland. If you hold concerns about any element of a legal agreement, including a tenancy agreement, you should seek independent legal advice. We cannot contract out of this position.
What are the key aspects of a PRT lease in Scotland?
There is no initial fixed term and by extension we cannot guarantee any set period of contract or end date. A PRT lease continues until either party gives due notice to leave. Tenants are only ever required to give 28 days’ notice.
Leases carry joint and several liability so notice to leave can only exist where all named tenants are in agreement to vacate. If you wish to leave the tenancy, you will have to have the agreement of your co-tenants to give joint notice, or you will have to source a replacement tenant which can only be actioned with the express consent of your landlord and may carry set conditions.
Your deposit will be lodged into one of 3 government approved custodial deposit schemes and your tenancy agreement will lay out the requirements for achieving a full deposit return once your tenancy ends.
You will be given a digital Inventory and Schedule of Condition once your lease starts. Review this carefully over the allowed 7 day period and submit any amendments and qualifying photos. At the close of your tenancy, this document will be used to highlight any deficiencies of cleaning or damages that exceed normal wear and tear.
How can I increase my chances of finding my next Student home?
If you are a tenant and know you and your flatmates will be vacating this summer, please let your landlord or agent know as soon as possible. While you only have to give 28 days’ notice, you can give any period of notice you desire longer than this and it is crucial to helping other students secure properties ahead of the summer months.
Finally, sign yourself up to Cullen’s student home waitlist. Let us know what months you would consider a tenancy from and we’ll send you notifications as and when properties come to the market.