Millions Of Tenants Happy With Buy To Let Homes
A wide-ranging survey of the buy-to-let market pulls back the curtain to reveal what tenants think about their private rented homes.
Although housing charities like Shelter and Generation Rent paint a horror picture of unscrupulous landlords preying on renters living in cold, damp and dilapidated homes, the government’s English Housing Survey for 2019-20 offers a different perspective.
Undoubtedly, some landlords are rogues, and councils rightfully haul them before the courts.
But the survey confirms private renters are mainly happy with their lot.
· Three-quarters of private renters have no gripes with landlords over repairs and maintenance, compared with two-out-of-three social tenants
· A massive 83 per cent of private renters are satisfied with their homes, while satisfaction levels drop to 78 per cent for social renters
· Fewer private renters (7 per cent) live in overcrowded homes than social renters (9 per cent).
· Huge numbers of private tenants (84 per cent) enjoy living in their current neighbourhoods, ranging from 77 per cent in the North West to 92 per cent in the East of England.
The survey, released by the Ministry of Housing, offers a snapshot of the private rented sector and delves deep into the feelings and aspirations of tenants.
Buy-to-let is in decline
The number of private rented homes is declining, falling by 300,000 households since 2016-17, when the sector had 4.7 million homes and a 20 per cent share of all households in England.
The private rental sector comprises one in five households in England. That’s 4.4 million or 19 per cent of all households making buy to let the second-largest tenure.
Owner-occupation takes the most significant slice of homes — with 15.4 million households or 65 per cent of the housing sector. Social housing accounts for 4 million homes (17 per cent of all households).
Paying the rent
Around 8 per cent (one in 12) of private renters confirmed they had rent arrears during the past 12 months, with 3 per cent still owing money.
Lone parents are twice as likely to have had rent arrears in the past year than couples with dependent children and three times as likely to have arrears than couples with no children.
Only 16 per cent of renters aged 16 to 24-year-olds and 14 per cent of over 75s struggle with paying their rent, compared to 31 per cent of 35 to 44-year-olds and 32 per cent aged between 45 to 64 years old.
Younger tenants expect to buy a home
Expectations of buying a home taper away the older a tenant becomes.
Three out of four renters between 16 and 34 expect to buy their own home at some time.
Older tenants are less hopeful, with the number expecting to move to their homes dropping off as they age.
Two out of three tenants aged 35 to 44 want to buy their own homes. The number falls to 41 per cent for 45 to 64-year-olds and 12 per cent for 65 to 74-year-olds.
However, 68 per cent of renters not planning to buy a home said they could not afford to save a deposit.
£21.5 billion cost of green improvements
The government expects to buy to let homes to score an Energy Performance Certificate rating of C by April 2028 to avoid removing the house from the buy-to-let market.
The survey calculates the average cost of improving a private rented home’s rating C is £7,846 and that landlords would have to spend a combined £21.5 billion to upgrade from a D or lower rating to C.
Older tenants less likely to rent
One in three renters falls in the 25 to 34-year-old age group. Older tenants are less likely to rent — only 5 per cent are renters aged 65 to 74, falling to 3 per cent for those aged 75 or over. By number, this is 371,000 households.
Households with dependent children account for 1.6 million private rented homes.
Average rents hit £871 a month
More than three-quarters of private tenants work, and most have a full-time job (67 per cent).
Average weekly incomes vary across the country, with tenants in London earning the most — £1,136 a week. The lowest earnings were £427 a week in the North-East.
Private tenants pay an average rent of £201 a week (£871 a month), ranging from £117 a week (£507 a month) in the North-East to £342 a week (£1,482 a month) in London.
Councils pay a fifth of private renters' housing benefits.
Tenants leave rented homes by choice
Most private renters (76 per cent) left their previous buy to let home because they chose to end the tenancy. Landlords asked 8 per cent of tenants to move on.
Around 956,000 private renters moved during the survey year after living in their homes for less than 12 months.
The buy-to-let sector saw 131,000 new tenants rent a home.
The main reasons for moving were job-related (14 per cent), buying a home (13 per cent), and moving to a larger property (13 per cent).
Many tenants explained that they did not want to buy because they enjoyed the flexibility of renting a home (11 per cent) or liked the property where they lived (15 per cent).
About the English Housing Survey
The government has carried out the English Housing Survey since 1967.
The survey looks at housing across the country and includes a separate report on the private rented sector.
Researchers quizzed 13,332 private tenants between April 2019 and March 2020 to come up with the findings.
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Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.