The survey considered factors such as the relationship between landlords and tenants, challenges and changes in the market, the impact of the pandemic, regulation and government support. Mydeposits, in partnership with Ome, wanted to gain an in-depth view of the landlords and tenants point of view of the private rented sector’s future.
Overall, the survey showed that despite the common misconception that landlords and tenants don’t get on very well, 60% of landlords and agents rated their relationships as nine or ten out of ten. Tenants rated their relationship with their landlords to be on average 7.4 out of ten.
So what does this mean for property investors and property developers?
The majority of tenants and landlords agree that the relationship between the two sides is good, defying stereotypes. For those investors who were initially wary of entering the private rented sector because of the uncertainty of attitude and behaviour from tenants, they can rest assured that most already find their tenants to be agreeable.
The survey also investigated rent prices and how tenants viewed renting as offering value for money. 49% said that there is no value for money as renting is overpriced and leaves them unable to save – and rent is often more expensive than a mortgage! However, 51% think that renting does offer value for money as it is flexible, and they don’t have to cover maintenance costs (this is a view also shared by 75% of landlords and agents). However, 51% also recognised that the reason they rent is affordability – they can not yet afford a deposit on a home and therefore renting is their only option.
This provides some excellent insight for property investors and property developers looking to enter the private rented sector. By considering the views on affordability, investors may see an opportunity to offer rents that people find more appealing. By appearing as the better choice, you are more likely to attract long-term renters and keep the property occupied and paid for by making that small reduction in rent.
Rent arrears was an issue that was brought to the forefront in 2020 due to the COVID-19 pandemic. With rent and mortgage breaks offered to help people keep on top of other bills and keep themselves afloat during the pandemic, we expected to see many people fall into rent arrears. However, the survey has shown that 95% of tenants have said they are not in arrears due to COVID-19. And 58% of those who did struggle said their landlord was accommodating, with 31% offering reduced rent or a rent holiday. On the other side, 31% of landlords and agents said their tenants were in arrears due to COVID-19, identifying rent arrears as one of the most significant challenges in the rental market.
For property investors and developers looking at the buy-to-rent market, this can be concerning admissions from current landlords and agents. However, the UK is already on the road to recovery from the pandemic, with restrictions easing, a top vaccination rollout and many people already re-entering the property market. Future investments are looking to be strong, and with the Stamp Duty Land Tax holiday extended till the end of June, now is the time to invest.