THE coronavirus pandemic has “dealt a harsh blow” to the student accommodation sector with nearly £100 million in rent waived, according to Scottish legal experts.

It comes as universities consider new course formats in the post-Covid society and providers are left with the huge financial shortfall.

Student housing specialists at CMS have also said that while the new Holyrood Coronavirus Bill will help students it could also work against the provision of such accommodation.

The Bill includes measures that allow automatic cancellation right for students, allowing them to get out of accommodation agreements for Covid-related reasons.

While this is said to be completely fair and sensible, it is claimed there is a potential impact this could have on investment into student accommodation property where 87 per cent of all new beds in the UK have been delivered by private sector providers.

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Margaret McLean, partner and student housing specialist at law firm CMS, said: “The Bill is a win for students, giving financial peace of mind regarding tenancy contracts - particularly given the uncertainty as to what this coming academic year will look like, as many Scottish universities announce delayed start dates for their autumn terms and work to combine traditional on-campus learning with online teaching.

“The Covid pandemic has, however, dealt a harsh blow to the student housing sector. Scottish Property Federation data reveals that even before the Bill, private providers in Scotland had voluntarily waived some £59 million of student rents, with Scotland’s universities having waived £38.5m, and many providers have also gone beyond the Bill’s proposals, offering release from contracts for next year where courses are terminated or run online, or delaying contracts if courses are delayed.”

She welcomed extending the notice period from seven days to 28 for the next academic year, saying: “In normal times, marketing of student rooms starts some nine or 10 months before the academic year the students are due to move in.”

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Ms McLean said: “In addition, the Scottish Parliament has also temporarily extended current council tax exemptions for students to address the sector’s concerns that providers could, inadvertently, also find themselves liable for council tax where rooms are vacant due to coronavirus related reasons.

“The support of the Scottish Government on these matters has been welcomed by the sector, as they face a challenging year ahead given the uncertainty around construction delays and student take-up of their accommodation, as the extent of international travel restrictions and social distancing guidelines remain unknown. However, the sector is a highly resilient one, with a history of low volatility and good growth.

“It emerged from 2019 in a very strong position in spite of the economic and political disruption, and with existing investors in the market publicly supporting the long-term fundamentals of the UK sector, the current blow is expected to be a temporary one.”

Darina Kerr, partner and higher education specialist at CMS, said pre-coronavirus investment in the sector had been strong.

She said: “The sector has without doubt been weakened by the Covid-19 global pandemic, and both universities and private providers face a tough year ahead.

“Inevitably, there is some uncertainty as to student numbers and term dates, and the temporary shift to partially remote teaching and learning adds a further unknown to an already complex picture.” While the pandemic “will undoubtedly result in a transactional pause for providers, there remains a strong appetite for higher education and for the traditional university experience to continue making the sector well placed to bounce back when lockdown and travel restrictions ease and greater certainty returns to the market".