Buy-to-let landlords should be pleased their tenants like them!
Contrary to media headlines, and despite the kicking that the government has given buy-to-let landlords in the past few years, the private rented sector (PRS) is loved by tenants. When compared to social housing, a tenant of a buy-to-let investor is more likely to be happy with their home and with their landlord. This is what the findings of the latest English Housing Survey tell us. It’s likely to make painful reading for a government that wants to increase the amount of social housing in the market.
In addition, the survey provides a big clue as to what tenants seek for the long-term stability of rental income.
84% of PRS tenants are happy with their home
The PRS has grown at quite some rate over the last few years. Much of this growth has been from new buy-to-let investors, with little or no experience of being a landlord. With such rapid growth, you might expect tenant satisfaction numbers to have fallen. Yet, this is not the case. In fact, 84% of tenants are happy with their current accommodation (compared to 81% in the social renting sector).
72% of PRS tenants are happy with their landlord’s maintenance work
Repairs and maintenance is another area in which buy-to-let landlords are better than social renting landlords. 72% of PRS tenants reported that they were satisfied with how their landlords conducted repairs and maintenance, compared to 66% in the social renting sector.
The PRS is getting safer for tenants
One of the concerns that the government has been at pains to address is the provision of safe and habitable properties. Clearly, there are still rogue landlords around – the PRS is more likely than the social renting sector to provide a tenant with a property with at least one Category 1 hazard. However, the good news is that the percentage of properties in this category has halved to 15% since 2008.
For long-term rental stability, let to older tenants
The PRS has doubled in size since 1996/7. There are now 4.7 million households in the sector. According to the English Housing Survey, the mean length of tenancy varies wildly between age groups:
- The average tenancy length in the PRS is 3.9 years
- The average time a person over 75 years old has been in their tenancy is 17 years
- 16- to 24-year-olds stay in a property less than a year
The number of tenants in the PRS is generally growing in all age ranges, but most markedly in the 25- to 34-year-old group. Now, 46% of this age group are renting in the PRS, up from 25% in only 10 years.
Younger tenants are more likely to want to buy their own home
The survey found that 60% of tenants want to buy their own home – eventually. 81% of these were in the 16- to 24-year-old age range. Further, in 2016/17, more than two-thirds of moves out of the PRS were made by tenants becoming owner-occupiers.
What does this all mean?
There are a few conclusions that we can draw from this survey. For example, younger tenants are less likely to want longer tenancy agreements. This is surely something that the government should consider in its deliberations on extending minimum tenancy periods to three years.
It’s also likely that the short-term nature of tenancies in the younger age group is skewed down by the number of students renting in the sector. These tend to remain in the same property for a far shorter time than others.
We can also surmise that, as tenants grow older, they become more relaxed with renting and tend to stay in a property longer. By the time they have reached retirement, if they have not yet bought a home, they are most unlikely to do so.
Finally, shouldn’t the government act most aggressively in the sector that provides lowest tenant satisfaction numbers? As it evolves its housing policy, perhaps the government should focus on increasing tenant satisfaction in the social renting sector and figure out ways to reward the best landlords in the PRS.
To help ensure they offer the best properties to the best tenants in the PRS, increasing numbers of landlords are signing up with Ezytrac. Isn’t it time you contact us on +44 0 1522 503 717 to discover the benefits of effortless property management?
Live with passion,
Brett Alegre-Wood