Busting a few rental mythsBy Mark Long
Originally published on Mortgage Solutions on 06 January 2015
Whilst we know an increasing amount about the attitudes and behaviour of buy-to-let (BTL) landlords (the end-customers of numerous lenders reading this blog), much less is known about the aspirations of landlords' customers - the private tenants renting the property funded by BTL loans.
At BDRC, we have recently launched a periodic survey of UK renters. Our research is generating some interesting insights and busting a few myths around the landlord-tenant relationship and renters' housing aspirations.
We found that one in four renters wants to buy a house in the longer term. Four in ten will stay in the private rental sector (PRS), predominantly because they believe they cannot afford to buy.
The typical tenant is paying almost £600 a month for their property, representing 37% of their income. Although 70% of renters feel that their rental payments represent good or very good value for money, a quarter (25%) believe they get poor value from their landlord. Whilst the majority of tenants (72%) saw no change to their rents in the 12 months to Q3 2014, 27% did see an increase and only 1% reported a reduction in their payments in the last year.
There has been much discussion across the PRS about the merits of mandatory longer tenancy agreements. Our research indicates that the market is doing a reasonable job of regulating itself. Renters have been living in the PRS for an average of 13 years, and in their current property for seven years. Only 5% have ever had a request for a longer tenancy refused by their landlord.
82% of tenants are satisfied with their landlord and more than nine in ten regard their current rental property as their home. So whilst the PRS is not perfect (13% think they have rented from a ‘rogue landlord' at some point in the past), these are encouraging outcomes overall.
Click here for our infographic on the state of the rental market.