The English Private Landlord Survey 2018

Happy tenants. Happy landlords. Longer tenancies and no unfair evictions. It’s all possible! 

The 2018 English Private Landlords Survey (EPLS) – the first since 2010 – demonstrates that much-needed changes to the private rented sector, specifically to renter security, would have little or no effects on most landlords. The current system of rules reflects the interests and opinions of a small minority of landlords at the great expense of tenants who deserve better.

The EPLS surveyed 8000 landlords and letting agents and its findings were published last month. The questionnaire covered three main topics: landlord characteristics; their attitudes and behaviours; and, importantly, the future of the private rented sector.

What are some of the key findings and what do they mean for renter security?

Most landlords are willing to offer longer tenancies

The average tenancy length offered by landlords surveyed was 10 months and 9 months for agents. These figures are, sadly, predictably short. But, with 40% of landlords stating they would be willing to offer tenancies of longer than 12 months - and a further 38% willing to do so if a ‘break clause’ was included in the contract - there is clearly scope for reform.

Only 3.8% of landlords and agents said the initial fixed-term of their most recent letting was between 13 and 24 months and even fewer (1.6%) offered 25 months or more. So despite a willingness to offer longer tenancies, the reluctance to do this voluntarily illustrates the need for legislative change.

The most commonly selected reasons landlords gave for not currently offering longer tenancies were being happy with the current arrangements (48%) or having concerns about removing problem tenants (43%).

28% of landlords and agents selected tenants not wanting longer tenancies as a reason for not offering them. Many tenants, particularly students and young workers don’t particularly value a longer tenancy per se. However, it is highly unlikely that the 94.6% of landlords offering no-more-than-12-month tenancies only let to tenants who plan to move after a year. In any case, when it comes to security of tenure, policymakers are asking the wrong question: regardless of tenancy length, most tenants would rather know that they won't be kicked out without good reason.

A minority make life hard for tenants

Just as a large majority of landlords are open to longer tenancies, a large majority won't raise the rent unreasonably. Just 22% of landlords said that they raised the rent when they last renewed a tenancy. 

Similarly, when asked how the last tenancy ended, just 7% of landlords and agents had asked the tenant to leave, 7% evicted the tenant and 4% decided not to renew the tenancy. That is still nearly one-fifth of moving tenants who had to leave against their will in the last two years. Landlords often have little option but to end tenancies - most commonly stated reasons for evicting tenants were rent arrears (58%) or a tenant not caring for the property (45%).

However, other reasons for ending the tenancy included to refurbish the property and relet it (18%), to sell the property (14%) and that the tenant had too many complaints about the property (9%). In each of these cases the tenant is not at fault and it amounts to 41% of unwanted moves - thanks to section 21, tenants have little ability to challenge their landlord in these cases.

There are always circumstances where landlords must evict even a blameless tenant. But whether the grounds for ending a tenancy are reasonable or not, the short notice needed for doing so, combined with short tenancies, makes renting highly precarious. Furthermore, there is a financial incentive – exploited by a number of landlords – to end a tenancy and relet to new tenants (the survey also finds that 43% of landlords and agents increased the rent the last time they had new tenants). The ability of landlords to arbitrarily move tenants out and re-let to new tenants at higher rents should be prevented.

According to these figures, just 7% of landlords have forced out tenants who were not at fault (41% of 18%), while a fifth raise the rent on existing tenants. But 7% of 4.5m is a lot of people. If most tenants therefore have a decent landlord who offers a long term home with no nasty surprises, then why can't everyone expect the same treatment?

Open-ended tenancies can address most landlords’ concerns and provide real renter security

There is no shortage of proposals to overcome the barriers to offering longer tenancies. The government has set out its framework for a longer fixed-term tenancy. As part of the End Unfair Evictions Campaign, Generation Rent put forward a package of measures in response to the government’s consultation on its proposal. By scrapping section 21 of the 1988 Housing Act, limiting rent increases, and creating protections for tenants evicted on no-fault grounds, our proposals would in effect create genuinely secure, open-ended tenancies. This proposal was echoed in IPPR’s New Rental Contract published at the beginning of this year. The campaign to end unfair evictions is gathering steam. 

Landlords whose concerns are about genuine problem tenants shouldn’t be troubled by the proposals. They would still retain the power under Section 8 of the Housing Act 1988 to evict tenants who cause damage to property, fall unacceptably behind on rent or engage in anti-social behaviour, as long as they can prove their reasons for doing so. Sounds fair, right? In fact, the reformed system in Scotland, which saw little resistance from private landlords, provides 18 different grounds on which a landlord can apply to evict a tenant.

Simply put, genuine renter security is compatible with the concerns of a large majority of reasonable landlords and the results of the EPLS further highlight the stark imbalance of power in the relationship between renters and landlords in England. The current rules reflect the demands of a stubborn minority of landlords (around one in five) who either outright oppose extra security for renters or aren’t willing to do anything about it.                            

What would happen to that minority opposed to greater tenant security?

Sitting tenant sales can keep supply of rental homes steady

The EPLS found 53% of landlords planned to keep their number of rental properties the same and 11% planned to increase the number of properties they own. 10% of landlords planned to reduce their number of properties and 5% plan to sell all their rental property and leave the rental business.

The findings show that for the most part property sold by landlords can be picked up by other landlords looking to increase their portfolio size and continue to be let in the sector. A requirement on landlords to make a relocation payment to tenants evicted on no-fault grounds would create an incentive to sell with sitting tenants (as well as mitigate the upheaval of an unwanted move). Moreover, if a landlord does sell to an owner-occupier, in most cases the effect will be neutral as the new owner will have freed up a property to buy or rent in leaving their old home.

We believe this finding strengthens the case that tenant security can be achieved through our call for open-ended tenancies without major distortions to the market. Here’s how. Landlords are able to sell their rental property, but do not need to order a possession to do so. Landlords can sell the properties they own to other private landlords with tenants still living in the property and who will continue to rent the house from the new landlord. This is known as a sitting tenant sale.

Scrapping section 21 and creating new stipulations for landlords looking to evict tenants in order to sell a property – specifically, a longer notice period and a three-months’ rent relocation payment to tenants – will incentivise landlords to make use of sitting tenant sales, minimising the upheaval caused by having to move home without being at fault whilst keeping homes in the private rented sector.

Making common practice the law

The English Private Landlord Survey demonstrates that most landlords would accept tenancy reform that allowed renters to feel properly at home. Only a minority make use of their ability to evict tenants not at fault, or raise the rent by as much as they can. But because the law favours the latter, tenants have no idea how their landlord will behave - even merely asking them for certainty could risk souring the relationship. It is a perception that landlords generally treat their tenants poorly, but it is one that only a change in the law will be able to dispel.

 

Tarun Bhakta is an activist on the campaign and a Public Policy (MSc) student at University College London 

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