Most people renting their home in the private rented sector are happy with their property and landlord, new research reveals today.
The Social Market Foundation found that – contrary to some narratives suggest renting is an inherently unhappy experience – a majority of people who rent from a private landlord are content with what they get for their money.
In an SMF survey of renters, 81% said they are happy with their current property, and 85% said they are satisfied with their landlord. (See Notes for survey results and method.)
The greatest source of dissatisfaction among tenants is with “being a renter”, though only a minority of renters (34%) said they are dissatisfied with this status. The SMF said that this suggests that where people are unhappy in the private rented sector it is not about their living circumstances, but about the fact of having to rent rather than own a home.
The SMF findings are contained in a report on the future of the private rented sector which is published today. The report was sponsored by Paragon Bank. The SMF retained editorial independence.
The SMF said despite renters’ current views of renting, major trends in housing over the coming years mean that several policy changes are needed to ensure the rented sector continues to work well for tenants.
Only half of renters expect to leave the private rented sector in the next 15 years, suggesting that significant numbers will remain renters for long periods. Among them, the SMF finds that 13% would be satisfied with long-term renting.
That will see the average age of tenants rising: by 2035, more than half of private renting households are likely to include someone aged 45 or older, the SMF forecast. Couples and families will also make up a rising proportion of renters.
The private rented sector has been under political scrutiny, with the Government’s Levelling Up White Paper promising “a secure path to ownership” and a crackdown on “non-decent rented homes”. Labour, meanwhile, has promised to be the “party of tenants” and raised concern about quality, affordability, and security in private rentals.
The SMF’s research challenges some of the narratives around this policy agenda, and in particular, the assumption that private renting is unsatisfactory and exploitative for the typical renter.
At the same time, it acknowledges that a minority of renters have particularly negative experiences and so endorses measures expected to be in the rental reform white paper (due in spring), such as abolition of ‘no-fault’ evictions and introduction of a Decent Homes standard for rental properties.
The SMF’s key recommendation is to enable renters to build wealth while remaining in the private rental sector, addressing their number one concern: the financial opportunity cost of renting, which have prevented savings, for a deposit or later life needs. Several innovative schemes could be implemented, including ‘deposit builder ISAs’ that offer a financial return on deposits, or ‘rentership’ models that offer tenants stakes in their building.
Other SMF recommendations to the Government:
- Increase the stability of tenancy agreements – A large majority of renters support a fixed minimum contract length: 69% would be in favour of setting this at 24 months.
- Giving renters more control over their homes – making it easier to keep pets or make reasonable alterations, such as to décor or energy efficiency.
- Increase the accountability of landlords – Through a ‘Good Home, Good Landlord’ kitemark scheme, developed in consultation with renters to recognise landlords that offer good, and not just decent, accommodation.
- Improve the standards of private rented properties – Offer tax incentives for landlords to invest in improvements that align with Good Home Good Landlord kitemark standards, including green investments.
Aveek Bhattacharya, SMF Economist and one of the report authors, said:
“Dominant cultural narratives about the private rented sector paint a misleading picture. In contrast to the horror stories that get wide circulation, the majority of renters are satisfied with their living conditions and have decent relationships with their landlords. It is absolutely right that the Government should seek to help the minority with poor standard accommodation and unprofessional landlords. At the same time, it needs to think harder about what it can offer the typical renter – who is largely happy with their circumstances today, but has doubts about whether they want to keep renting long-term.
Giving renters more control over their homes – allowing them to keep pets or decorate would help. So would incentivizing landlords to make improvements to properties to make them good, and not just decent. But perhaps the biggest challenge is developing policies that can persuade renters that they are not missing out financial security and stability if they don’t own their home.”
Paragon Bank Managing Director of Mortgages Richard Rowntree said:
“The outdated and tired cliches around privately renting need to be challenged and I welcome the findings from SMF’s report. In our experience, the vast majority of landlords seek to provide a good quality home and enjoy a healthy relationship with their tenants; the significant investment in private rented property by landlords has helped drive up standards over the past 15 years and today homes in the sector are generally newer, larger and more energy efficient than ever before.
“We always seek ways to improve the experience of renting further and welcome the recommendations contained in the report. People from all walks of life now call the private rented sector home and we must strive to create a sector that meets everybody’s needs.”
- The report, Where next for the private rented sector?, was published at 08:00 AM on 14th March 2022 at smf.co.uk/publications/private-rented-sector/
- This report is sponsored by Paragon Bank. The SMF retained full editorial independence.
- SMF surveyed over 1,300 UK adults who currently live in rented accommodation. Surveys were distributed by Opinium.
- Modelling: The SMF modelled three scenarios for the future of the housing market in England using household projections from the Office for National Statistics
- High ownership: projects forward trends in tenure between 2014 and 2019, assuming that rising home ownership is sustained
- Low ownership: projects forward trends in tenure between 2004 and 2014, assuming that we return to the ‘old normal’ of rising private renting
- Mid ownership: projects forward trends in tenure between 2009 and 2019, producing an outcome in between the high and low scenarios.
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Key points from SMF survey:
- Policy and societal attention (rightly) focus on the minority of private renters (particularly those on low incomes) that have particularly bad experiences – for example, the one in ten tenancies terminated through a no-fault eviction.
- Yet this can create a misleading impression – the majority of private renters express contentment with their situation: 81% say they are happy with their current property, and 85% say they are satisfied with their landlord.
- The greatest source of dissatisfaction is with “being a renter”, though still only a minority (34%) say they are dissatisfied with this status. This suggests in most cases where people are unhappy in the private rented sector it is not about their living circumstances per se, but rather the mere fact of being a renter.
- Satisfaction with private renting is particularly high among older renters: nearly three-quarters (74%) of those aged 55 and over report being satisfied, compared to 58% of those aged 35-54.
- Private renters particularly value not having to pay for repairs, maintenance or insurance and other costs, with over two-thirds citing this as a benefit of renting; some also see it as a way to afford more expensive locations or to live more flexibly.
- At the same time, there are clear disadvantages to renting:
- 56% of private renters (and 63% of 18–34-year-olds) worry that it is a financially worse option in the long run.
- Renters also dislike the lack of control they have over their property: over half of renters are unhappy about their inability to make decisions over furnishing and décor, to improve energy efficiency, or to keep a pet.
- Despite the political focus on security and stability, this came lower down the list of concerns in our survey: four in 10 private renters said that they dislike the uncertainty of being on a fixed contract, rising to 45% of parents.
- Overall, most renters are happy to be where they are for now, but most do not see it as their ideal long-term option:
- 50% (two-thirds of 18–34-year-olds, and 39% of 35–54-year-olds) expect to leave the private rented sector in the next 15 years.
- 68% of those that expect to remain in the private rented sector would like to buy a property but do not think they will be able to do so.
37% would be satisfied to still be in the private rented sector in 15 years, though this rises to 74% of over 55s.