The Private Rental Market:
The private rented sector (PRS) has changed considerably since the last Private Landlords’ Survey in 2010. The number of households in the sector rose by 25% between 2010 and 2018, when these latest figures became available, from 3.6 million to 4.5 million households.
The survey, which is unlikely to be repeated for another eight years, was based on questioning almost 8,000 landlords and agents registered with one of the three tenancy deposit protection schemes.
The PRS now represents the largest tenure in England after home ownership, and represents one-fifth of all households. The sector contains a wide range of different sub-markets, serving a wide range of different types of households across all incomes, including an increasing number of families – in 2017-18, 35% of households in the PRS included dependent children (1.6 million households, up 37% from 1.1 million in 2010- 11).
Some key findings:
- Most landlords (94%) are private individuals rather than operating as a company or organisation, with just 4% incorporated, and 2% as some other organisation.
- Nearly half (45%) of private landlords own just one property, representing represents 21% of the private rented sector. But half of all private rented sector tenancies are let by those landlords (17%) owning five or more properties.
- 38% of landlords own between two and four properties, representing 31% of the sector, the remaining 17% owning five or more properties. These latter represent 48% of the private rented sector.
- Since 2010, the proportion of landlords with just one property has declined from 78% to 45% or from 40% to 21% of the sector.
- At the same time, the proportion of landlords with five or more properties has increased from 5% to 17% or from 39% to 48% of the sector.
- On average, landlords are older and less ethnically diverse than the general population. More than half (59%) are aged 55 years or older, with one-third being retired.
- Most landlords (89%) are White.
- 70% of landlords have let properties for 6 years or more, on average for 11.5 years.
- The most common reasons for becoming a landlord
- 46% preferring property to other investments;
- 44% contribute to their pension.
- Only 4% became landlords as a full-time business.
- 52% of landlords and 37% of agents said that they would be unwilling to let to tenants in receipt of Housing Benefit. Similar proportions reported that they would be unwilling to let to anyone on Universal Credit (47% and 33% respectively). The most commonly reported reasons for not letting to this group included the risk of delay in payment or unpaid rent and the risk that benefits would not cover the rent.
- 50% of agents increased the rent for their last letting to a new tenant compared to 42% of landlords. For their most recent tenancy renewal, 70% of landlords kept the rent the same compared to 63% of agents.
- A third (31%) of agents increased the rent for existing tenants, compared to 22% of landlords.
- For their last letting, 61% of agents took a deposit of more than four and up to six weeks’ rent (45% of landlords took a deposit of this size). Almost half (47%) of landlords took a deposit of up four weeks’ rent (compared with 29% of agents).
- Just over half of all English landlords don’t use a letting agent to let or manage their properties, whereas one-third (34%) use an agent for let-only, only 9% use an agent for both letting and management and 5% use an agent for management only.
The survey shows that despite the growth of the build-to-rent sector, the PRS is still dominated with 94% of private landlords operating as individuals, and nearly half with just one property. However, the trend is towards multi-property owning landlords who are likely to be more experienced and competent.
Despite the tax and regulation changes hitting the sector, over half (53%) of landlords plan to keep their portfolios intact, with 11% planning to invest further, 10% planning to reduce the number and 5% planning to sell up.
Agents were seen to be more diligent in complying with the regulations, such as providing tenants with the government’s “How to Rent” guide, gas and electrical safety certificates and the EPC.
The report provides comprehensive and detailed market information and an interesting read for anyone involved with the private rented sector.
Survey Published, January 2019
Read the full report here