Headlines are not reflecting the reality of the success of the Private Rental Sector

publication date: Aug 14, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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The headlines don't reflect the success of the private rental sector

There is a new campaign in town suggesting that tenants ‘deserve better’. But the reality suggests they are doing better and are, in the main, quite happy.

Tenants are happy!
A recent report from the English Housing Survey states that 95% of people were fairly or very satisfied if they owned a property and 84% of private renters felt the same. Social housing was the lowest performer with 81% saying they were happy. Many private renters were also happy with the location they lived, although interestingly, and something which requires more investigation, this sudden ‘happiness’ drops to 52% when asked if their current tenure was “a good way of occupying a home”.

Download Kate's full rental report here

It’s likely that this last stat is influenced by the fact that 61% of tenants say they want to buy a home, whereas in the social tenant sector, it’s only 23%.

Tenants’ property conditions are OK but there is room for improvement
Most tenants’ properties are safe to live in, with 83% of private tenants having a working smoke alarm (88-89% in owner occupation and social housing). Although, condition could be improved as the report says there are more problems with rented housing than other tenancies, although the report says the quality is increasing. This doesn’t though distinguish between self-regulated properties and ones which are rented out illegally.

Rent affordability is good
And from an affordability perspective, according to recent data from Homelet, the majority of people are paying rent which is well below the ‘affordability’ criteria of 2.5 times their income. Only in London are people suffering, but interestingly, although affordability is a nightmare in the property price market, affordability in London is only just below the 2.5 times income at 2.23.

Download Kate's full rental report here

Fewer tenants are struggling to pay their rent
Taking tenant arrears into account, these too are falling. According to LSL Property Services plc, owners of Templeton LPA, the specialist practice of LPA Receivers “Improvements mean 98.5% of private sector tenants now avoid significant rental arrears.” and “67,000 households remain more than two months behind on rent, compared to 102,000 in Q2 2013”

Despite talks of ‘retaliatory eviction’ and complaints against the short six month tenancy agreement imposed by most mortgage lenders, a survey from YouGov commissioned by Savills showed only 8% of tenants were asked to leave. ARLA’s survey suggests tenants stay for an average of nearly 20 months, so just under two years.

So overall, although some tenants do have a bad experience when it comes to renting - as do landlords when it comes to letting - most tenants are happy in the private rental sector, but, given the choice, would prefer to buy if they could afford it.

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