3 things we know about how private landlords work
Key findings from the government’s first survey of landlords in 8 years
We helped nearly 200,000 people with housing problems last year — almost 60,000 of those in the private-rented sector (PRS).
Typically people think the PRS is dominated by students and young professionals. But a significant (and growing) number of families and older people now rent privately.
These homes come at a cost. Private tenants spend an average of 34% of their weekly income on rent. By contrast, the average household spends less than 2% on their water bill.
Given the number of people who are privately renting, the high costs they pay and the importance of having a good quality home, it’s vital this market works well. The government has done much in recent years to help, such as banning letting agent fees, giving local authorities the power to ban rogue landlords, and requiring homes to be ‘fit for human habitation’.
But knotty issues remain. In particular, more needs to be done to enforce tenants’ rights, and make sure landlords comply with the law.
We’ve been thinking more and more about the role landlords play in making this essential market work. In late January, the government published findings from their first survey of landlords in 8 years. Here are 3 things we learned.
1. Most landlords own more than 1 property
45% of landlords let a single property. But these account for just 1 in 5 of tenancies. The rest are held by landlords who own 2 or more properties. The make-up of the sector has changed significantly since 2010.
From a tenant’s perspective, your landlord is most likely to be operating a small or medium-sized business, rather than letting out a single property. So there is little excuse for them to not be meeting their legal responsibilities.
But from a landlord’s perspective, nearly half are still operating on a small scale. So they might need extra support to get up to speed with regulations and make sure they are renting responsibly.
2. They tend to see themselves primarily as investors
Most of the landlords surveyed see their properties primarily as a source of investment, either for rental incomes or for pensions. Fewer than 1 in 5 view their properties as a full, or part-time, business. Only 13% viewed their role as that of a residential landlord.
This is worrying.
Providing an essential service comes with responsibilities — and there are few things more essential than the roof over your head. But if people don’t view themselves as residential landlords, they might not be aware of these responsibilities. For example, landlords must ensure repairs are carried out, even where they use an agent. You wouldn’t normally associate this kind of obligation with an investment.
Where people are unaware of legal requirements, they are less likely to live up to them.
3. Some are meeting their legal obligations, but many aren’t
Of landlords surveyed:
- 87% had carried out an annual gas inspection at their properties
- 84% gave tenants an Energy Performance Certificate (EPC)
- 61% said none of their properties have an E, F, or G EPC rating, meaning they’re more energy efficient.
These are all legal requirements.
At first glance, this looks like a promising level of compliance. But the survey only included landlords who registered with a tenancy deposit scheme, so they were already likely to be meeting at least 1 obligation.
We still know very little about landlords who aren’t registering their deposits. According to the English Housing Survey, these landlords account for between 29% and 44% of tenancies.
What this means for us
This year, we’re kick-starting a programme of work that looks at the rental sector in more detail. This data gives us a useful starting point. It tells us 2 main things:
- Many landlords still operate on a small scale and don’t see their properties as businesses. So they’re likely to need support to meet new requirements. And any further changes need to simplify the landscape, not make it more complex.
- Compliance levels vary drastically. We don’t know why some landlords meet their obligations and others don’t. But current enforcement clearly doesn’t deter some landlords from flouting their responsibilities.
We want the PRS to work for landlords and tenants. For this to happen, standards must be proactively enforced. And inadequate or illegal practices must be penalised.
This isn’t a high bar — it would simply bring private renting in line with other essential service markets, such as energy and water.
We’ll be exploring how to make that happen in the coming months.
