The Renters' Rights Act delivered its first operational test in the 2026/27 academic letting season, and the structural mismatch is now visible. Landlords and agents who relied on upfront rent payments to offset international student credit risk can no longer request more than one month in advance, closing a route to market for tenants without UK guarantors. At the same time, the abolition of fixed-term tenancies allows students to exit on two months' notice after summer exams, creating a void window that previously didn't exist.
The combination has left agents managing student portfolios with fewer lettable applicants and landlords pricing in extended summer voids that erode what was once a predictable 12-month income stream.
What landlords lost
Neil McGimpsey, chief operating officer at Lomond, told the Financial Times that landlords previously requested several months' rent upfront from international students unable to provide a UK-based guarantor. The Act's one-month cap removes that option entirely. The result is a credit gap with no obvious substitute. Guarantor insurance products exist, but they carry a cost that either the landlord absorbs or passes to the tenant, and many international students remain outside their eligibility criteria.
The letting pool has shrunk. Agents can no longer facilitate tenancies for a segment of applicants who were historically amongst the most committed: students arriving from overseas with limited housing alternatives and a fixed study timeline.
Valerie Bannister, lettings technical director at LSL Estate Agency Franchising, told the FT that the shift away from fixed-term tenancies has caused chaos. Students can now serve two months' notice and leave immediately after exams in May or June, rather than remaining contractually bound through the summer. That creates a structural void period between academic cohorts that landlords previously avoided by locking tenants into 12-month terms aligned with the academic calendar.
The government stated that landlords renting to full-time students can seek possession in summer to prepare properties for new students in the academic year. The Ministry of Housing spokesperson described this as ensuring properties are available for September intake. But the mechanism offers no protection against tenant-initiated early departure or the revenue lost during the resulting void. Landlords still carry the financial cost of an empty property for two to three months whilst preparing for the next letting cycle.
Cash flow and pricing pressure
Student lettings previously offered portfolio landlords a predictable model: sign tenants in January or February for September entry, secure fixed income through summer, and repeat the cycle annually. That model relied on two features the Act removed. Upfront rent provided working capital and de-risked international applicants. Fixed terms guaranteed summer income even when properties sat empty during the academic break.
Without them, landlords must now price summer voids into annual rent calculations or accept lower effective yields. If a six-bedroom house generates £2,400 per month and sits empty for ten weeks, the landlord loses £5,500 in gross income. Recovering that through rent increases in the 2027/28 cycle would require a near nine per cent uplift on a property let for 12 months, assuming full occupancy. That assumes the local market can bear the increase and that competing landlords don't exit first.
Some will. Small portfolio landlords in university towns who relied on student tenants for stable, low-maintenance income now face higher operational risk with no commensurate return. The predictable cash flow that justified holding student property has disappeared. Purpose-built student accommodation providers, which operate outside the private rental sector's regulatory framework and retain greater control over tenancy terms, may gain market share as private landlords withdraw.
Guarantor service providers stand to benefit. Demand for third-party guarantor products will increase as agents and landlords attempt to replace the financial assurance previously provided by upfront rent. Rent collection platforms offering payment monitoring and arrears insurance may also see increased adoption as landlords seek to mitigate tenancy risk under the new regime.