Landlords and Tenants Survey | NatWest

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Landlords and Tenants Survey

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Add your signposting title here… What do tenants really want?

It's no secret that the relationship between landlords and tenants can sometimes come under strain - but could it be nothing more than a case of misunderstanding?

We surveyed landlords and tenants to find out their attitudes to all the different parts of renting, from common bugbears to their favourite ways to sort out issues.

 

 

The results
 

(Results from a survey of 1,000 landlords and 1,000 tenants in the UK, conducted November - December 2017)

Who's responsible for what?

We asked both tenants and landlords who they think is responsible for fixing common problems, such as changing lightbulbs and fixing broken white goods.

 

  • Surprisingly, 8% of both tenants and landlords believe it’s the landlord’s responsibility to change a lightbulb
  • New renters are less knowledgeable than others, with 14% of students thinking their landlord should change a lightbulb
  • 59% of landlords said fixing broken white goods was their responsibility, but a quarter (25%) said it was the tenants

Chris Horne, portfolio landlord and founder of Property Hawk, has a simple way of knowing who should deal with what issue:
 

“The starting point for any maintenance questions should be the tenancy agreement or lease. Even with written tenancy agreements, these documents are rarely explicit on every item. Generally, the rule of thumb is that if the items were there when the tenant moved in then it’s the landlords’ responsibility; otherwise the responsibility lies with the tenant.”

Becoming a landlord

We asked landlords how and why they started letting properties:
 

  • A Buy to Let mortgage is the most common way landlords buy their first rental property, with 43% taking one out
  • Just over two fifths (41%) of landlords are keen investors, deciding to get into renting for investment purposes
  • London landlords are much more likely to rent property as their main career – 35% say renting properties is their primary source of income, compared to 20% nationally
  • Portfolio landlords seem more cautious than landlords with fewer properties. 16% of portfolio landlords ask for six weeks rent as deposit, double that of landlords with fewer than 4 properties
  • Landlords in the North West are finding the best rental yield (annual rental income as a percentage of a property's value) from their properties, with the average rental yield coming at 10.6%
  • There were knowledge gaps for first-time landlords, with 24% either not knowing what rental yield is, or not knowing how to work it out.
  • Perhaps more surprisingly, 13% of those who say letting is their main source of income don’t know how to calculate rental yield

Paul Shamplina, founder of Landlord Action, is not surprised that Londoners are more likely to be career landlords:
 

“The demand in London is far greater than anywhere else, with the average rent in Greater London nearly £1,600 per month. With such high demand in the capital, those who don’t have large mortgages can earn far greater profits.”

The changing rental market

The rental market is changing. With a combination of stricter regulations and the rise of holiday letting sites like Airbnb, more landlords are changing the way they rent their properties:

 

  • This year Airbnb announced that one of the fastest growing Airbnb destinations in the UK is the East Midlands, where inbound guest growth has increased by 134% since summer 2016*. But our survey revealed only 8% of landlords in the East Midlands think Airbnb has a positive influence on the rental market
  • Nearly two fifths (38%) of landlords are feeling positive about the future of the rental market and want to buy new properties for rental in the future

Chris Horne notes that the difference between traditional buy to let and Airbnb is all about management: 

 

In these areas [tourist hotspots such as London and Bath] where a landlord is prepared for a higher management input, Airbnb can offer a genuine alternative to the traditional buy-to-let model. The returns can be significant, which is why it has become so popular in certain areas… That said, an Airbnb letting, particularly a successful one, is more like running a mini B&B or hotel – not the model that most landlords are used to with a buy-to-let.”
 

*Airbnb UK Insights Report, September 2017, page 40

Rent affordability

Rental poverty is when someone spends a third or more of their monthly income on rent and bills. The survey revealed that many people in the UK fall into this bracket:
 

  • Over half of the tenants surveyed live in rental poverty (57%). A staggering quarter of tenants (25%) spend over half of their income on rent
  • Nearly a third of tenants have struggled, or are currently struggling, to pay their rent, with 31% needing help to pay for rent where they currently live
  • Tenants in Northern Ireland have needed the most help, with 58% needing financial assistance with the rent on their property
  • Despite this, 58% of tenants surveyed think they pay a fair price for their current property
     

Paul Shamplina explained that when a tenant is satisfied, they are happy to pay more rent:

 

“After a long period of incessant rent increases, rents appear to have finally slowed in many areas. I think most tenants make a property choice based on their personal affordability which is why 58% believe the price they pay is fair.  If tenants prove themselves to be reliable, many landlords will consider negotiating a reduction or to keep rent the same, so they can keep a good tenant.”

Advertising and viewings

Landlords think differently to tenants when it comes to advertising their properties:

 

  • Tenants seem to be more tech savvy than landlords, with 37% finding their current property on a website or app, even though only a quarter (25%) of landlords advertise online
  • When it came to viewings, just over two fifths (41%) of tenants think having enough time to look around is a priority
  • Landlords who self-manage their properties appear to have a better knowledge of what tenants want. Half (50%) of landlords who manage their properties listed having enough time to look around as being a priority, compared to 28% on average

 

Paul Shamplina explains why some landlords use different methods:
 

“With people leading busy lives, being able to search on their phones via apps while on the move is increasingly important. The vast majority of letting agents acting for landlords will advertise properties on the major portals such as Rightmove and Zoopla, as well as making use of social media.”

Relationships and communication

The survey revealed that timely communication between landlords and tenants is key to a happy relationship:
 

  • Tenants are generally happy, with nine out of ten (90%) saying their relationship with their landlord is okay, good or very good
  • Phone calls are tenants’ preferred way for their landlords to get in touch, with just over a third picking this as their favourite. Landlords would rather keep things written, with 41% preferring to use email.
  • But if landlords want a better relationship with their tenants they should think about picking up the phone: 44% of tenants with a very good relationship with their landlord spoke on the phone
  • Tenants really don’t like being ignored by their landlord: 32% of tenants listed landlords who are slow to deal with issues as one of their top three landlord bugbears
  • Despite being an important issue for renters, just over one in ten (12%) tenants typically have to wait a month or longer for issues to be dealt with in their current property
     

Kate Faulkner, property market analyst and commentator, explains why keeping a paper trail is a good idea:
 

“The best approach to communication between a landlords and tenants is to have a good rapport directly, but due to the legal involved, always follow up discussions/agreements in writing, with evidence that this was delivered, or use an ARLA/RICs qualified agent to do this on your behalf. With £30k civil penalties now possible, landlords need to seriously think if they are able to keep up with, and abide by, the law and have the skills to deal with disputes.”

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