If you like statisitics then you will find a bundle of them in the recently published Private Landlords Survey 2010.
I am just going to take a quick look at some of them here – if you want to see them all, you will find the report online here.
Lies, damned lies, and statistics
The first thing that struck me was that it is taken from the results of 1,051 telephone and face to face interviews with landlords and agents.
Nobody knows exactly how many private landlords there are but it is estimated to be in the region of one million. Thats a sample then, of just over 1%.
So the survey may be ‘statistically significant‘ but bear in mind that 99% of landlords have had no input into it. So the findings should be taken with a strong pinch of salt.
The first thing the survey tells us is that the vast majority of landlords are people rather than companies. The survey says 89%, but it could well be more than this, bearing in mind that landlords who are individuals are more likley to be ‘invisible’ than landlords who are companies.
Then 81% of all landlords own just one property. This means 40% of rented properties, a large chunk.
Also 97% of landlords own less than five properties, accounting for 61% of all rented property. However the 3% who own more properties than this, account for 22% of the total rented housing stock.
This massive skew towards the small, and inevitably amateur, landlord has a number of consequences:
- they are generally part time landlords getting less than 25% of their income from their properties
- they are more likely to have bought their property within the last ten years
- 63% have no relevant qualifications or experience, with only 6% being members of a relevant professional body or organisation (as opposed to 85% of agents)
It seems that a very large proportion, 70%, of landlords have been landlords for ten years or less, 40% of these for four years or less.
This will no doubt be due to the very large number of private individuals taking advantage of the buy to let mortgage to invest in property, often as an alternative to investing in a traditional pension fund.
Property for most people is seem as ‘safe’. However much it may go up and down in value, it is still physically there – you can go round and touch it. And people will always need somewhere to live.
As opposed to other, less corporeal, investments whose value can fluctuate wildly as a result of things beyond your control, and which can even evaporate altogether as a result of the gung ho activities of testosterone driven young men in the financial sector.
So it is not surprising really that so many people have decided to invest in a property or two.
Generally the housing owned by these recent landlords is newer and therefore in better condition than that owned by people or companies who have been landlords for a much longer time.
The properties being rented
A large proportion of all rented properties, 41%, were constructed just after or before the end of the first world war (1919). Properties built post 1990 comprise just 13% of the rented housing stock.
The older housing stock is more likely to be owned by longstanding landlords, with newer entrants tending to own newer properties.
As to property type, 60% are houses, with 31% being terraced houses. With flats, 26% of all properties are purpose built flats with just 14% being converted. The converted flats are more likely to be owned by full time landlords.
So far as the property condition is concerned, only 54% meet the decent homes standard – the properties failing the standard are more likely to be owned by longer standing landlords (no doubt largely because they tend to own the older properties).
As the decent homes standard is considered by many to be an inadequate standard anyway, this means that a substantial proportion of rented homes are in a pretty dismal condition.
Energy performance certificates
As regards energy performance certificates, 42% of landlords have had one done, with a further 20% saying that they are going to.
However of those who have obtained a certificate, 70% say that they are not going to make any improvements at all, and of those who do carry out improvements, 10% only do minor (under £50) improvements.
So thats a fat lot of use then!
A quick whip through the rest of the report reveals:
- Most (78%) of landlords say that they will carry on being landlords if their tenants move out.
- Some 52% of these landlords say (apparently) that they will rent at the same rent. Although I am a bit sceptical about this finding – the landlords may have said this when the survey was done but I suspect many of them will have changed their minds since.
- Nearly half, 49%, of properties let by private landlords have been let to the current tenants for under two years. A lot of ‘churn’ therefore.
- 19% of dwellings have tenants on housing benefit and apparently 47% of landlords said that they would be happy to rent to tenants on benefit (I am not sure I accept that finding)
- 43% of landlords use letting agents
- Only 13% of landlords and agents cited tenant debt or arrears as being a serious problem
- Virtually all landlords (97%) use a written tenancy agreement, which is good news
- 38% of landlords want more information on tenancy law and 34% want more information on electricity regulations
A lot of the findings here are pretty obvious. The older landlords own the oldest properties and these tend to be in the worst condition, etc.
Many of these properties incidentally will still be let out under Rent Act protected tenancies where the landlord has only a limited ‘fair rent’ income. Which may partly explain why there is little repair and improvement work being done.
However it is worrying that the private rented sector, which is becoming so important for housing poor and vulnerable people in our society, is largely owned by part time amateur landlords who have little or no relevant experience or qualifications.
If the private rented sector is to be encouraged as the solution for our current housing problems, I would have thought it essential that government do more to encourage larger companies to invest (and perhaps more importantly, BUILD) suitable housing for renting out to tenants, and for this to be done in a more businesslike way.
What do you think?