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Investigating the effect of Welfare Reform on Private Renting

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Abstract and Figures

The private rented sector (PRS) over the past twenty years has changed significantly, doubling between 2001/02 and 2011/12 and now provides a home for 4.7 million households (MHCLG, 2018a). Tenants are becoming more diverse, with an increasing number of families, ageing renters, and the most vulnerable calling the sector home. Private landlords are now playing a vital role in providing housing to those on low-incomes and the homeless. Recently, there have been many policy changes that affect the most vulnerable in society and their ability to access a safe and secure home in the PRS. These include the roll-out of Universal Credit (UC), the freeze to Local Housing Allowance (LHA) rates, the two-child limit under tax credits, and the extension of the Shared Accommodation Rate (SAR) to all single people under the age of 35. The principal aim of the present study was to examine the effect of welfare reforms on the private rented sector, including but not exclusively the impact of universal credit on landlords and the broader sector. A further goal of this report is to continue the monitoring of key trends in the sector. The research findings are based on the responses of 2,234 landlords across the UK.
Content may be subject to copyright.
Investigating the
effect of Welfare
Reform on Private
Renting
Dr Tom Simcock • October 2018
State of the PRS: Quarterly Report
1 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
About the Residential Landlords Association
The home for landlords
The RLA represents the interests of landlords in the private rented sector across England and
Wales. We’re home to over 50,000 landlords nationwide, with a combined portfolio of over a
quarter of a million properties. A growing community of landlords who trust and rely on us to
deliver day-to-day support, expert advice, government campaigning, plus a range of high-quality
services relevant to their needs.
At the RLA, we understand the challenges faced by a landlord - after all, we’ve been fighting their
corner for over 20 years. Providing the expertise, support and tools they need, so they can do
the right thing for themselves, their tenants and the industry as a whole.
We campaign to improve the private rented sector for both landlords and tenants, engaging with
policymakers at all levels of Government. Our vision is to make renting better for everyone
involved in the private rented sector. We will go the extra mile to deliver a better informed, more
educated and more supported membership community.
For more information about the RLA, please visit https://www.rla.org.uk
You can also call us on 0161 962 0010, email info@rla.org.uk or tweet us @RLA_News
About the RLA Private Renting Evidence, Analysis and Research Lab
The home for research
PEARL, the RLA’s research lab, was set up to provide high-quality research and analysis on the
economic, social, and political issues facing the private rented sector.
The RLA believes in the importance of policymakers considering the evidence and the potential
consequences in their decision-making. Through PEARL, we provide the expertise, evidence,
and research, to enable evidence led policy making in the private rented sector.
Our ultimate aim is to influence decision makers in order to translate our research findings into
an improved renting experience. Enabling landlords to do the right thing - for their businesses,
their tenants, and the industry as a whole.
For more information about the RLA’s Private renting Evidence, Analysis & Research Lab
(PEARL), please visit research.rla.org.uk
You can also call us on 0161 495 9317, email research@rla.org.uk or tweet us @RLA_PEARL
2 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
About the Author
This report is written and researched by Dr Tom Simcock of the Residential Landlords
Association.
Dr Tom Simcock MBPsS CMRS is the Senior Researcher for the RLA. Tom leads the RLA’s
research arm; the Private renting Evidence, Analysis and Research Lab (PEARL). His expertise lies
in researching change in society, public policy, and quantitative and qualitative research
methodologies. Tom’s research on housing has received national media coverage, featuring on
the front page of The Times, has influenced government policymaking, and has been cited in
debates in the House of Commons, House of Lords and by the London Mayor.
Disclaimer
This research report has been written to inform and stimulate policy debate. While effort has
been made to ensure that the data and other information are accurate, some errors may remain.
The purpose of the report is to provide information, analysis and background regarding the
issues affecting landlords and the private rented sector. It is neither intended for use in
advertising and promotions nor for market forecasting, and no liability is accepted in either
regard.
Copyright
Intellectual copyright resides with the Residential Landlords Association. However, we want to
encourage the circulation of our work as widely as possible while retaining the copyright. We,
therefore, have an open access policy which enables anyone to access this report online for free.
Anyone can download, save, and distribute our work. Extracts may be quoted by the media with
appropriate credit to the report author and the RLA. All copyright and registered trademarks
remain the property of their owners.
Preferred citation
To cite this report, we would prefer that you use the following:
Simcock, T.J., (2018). Investigating the effect of Welfare Reform on Private Renting. Manchester:
UK. Residential Landlords Association. Retrieved from: https://research.rla.org.uk/wp-
content/uploads/investigating-effect-welfare-reform-private-renting.pdf
3 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Contents
Executive Summary ......................................................................................................... 4
1. Introduction ................................................................................................................. 7
2. Examining the Impact of Universal Credit on Private Renting.................................. 10
3. Key Trends in the Private Rented Sector .................................................................. 17
4. Welfare Reform and the Private Rented Sector ........................................................ 28
5. Practice & Perceptions of Tenancy Lengths in the PRS ........................................... 36
6. Who are Landlords? ................................................................................................... 40
7. Who are Tenants? ...................................................................................................... 45
8. Landlord Property Portfolios ..................................................................................... 51
9. Conclusions and Recommendations......................................................................... 55
10. References ............................................................................................................... 60
4 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Executive Summary
The private rented sector (PRS) over the past twenty years has changed significantly,
doubling between 2001/02 and 2011/12 and now provides a home for 4.7 million
households (MHCLG, 2018a). Tenants are becoming more diverse, with an increasing
number of families, ageing renters, and the most vulnerable calling the sector home.
Private landlords are now playing a vital role in providing housing to those on low-
incomes and the homeless. Recently, there have been many policy changes that affect
the most vulnerable in society and their ability to access a safe and secure home in the
PRS. These include the roll-out of Universal Credit (UC), the freeze to Local Housing
Allowance (LHA) rates, the two-child limit under tax credits, and the extension of the
Shared Accommodation Rate (SAR) to all single people under the age of 35.
The research in this report builds upon our previous quarterly reports on the private
rented sector and provides the opportunity for greater understanding of the issues
experienced by landlords due to welfare reform. Since the publication of our last research
report on this policy area, the DWP have introduced a number of significant positive
changes to the implementation of Universal Credit, including but not limited to; the
abolition of the 7-day eligibility waiting period, the 2-week housing benefit run-on, the
advance payment to up to 100% of the claim and the extension of the maximum payment
window from 6-months to 12-months, and the removal of explicit consent when
applying for an Alternative Payment Arrangement (APA) when the tenant is in rent
arrears of 2 or more months. The previous research findings were provided as evidence
to the Work and Pensions Select Committee, and since then the RLA has seen a
significant improvement in the willingness for the DWP to work in collaboration to
overcome challenges with the continued roll-out of Universal Credit.
The principal aim of the present study was to examine the effect of welfare reforms on
the private rented sector, including but not exclusively the impact of universal credit on
landlords and the broader sector. A further goal of this report is to continue the
monitoring of key trends in the sector. The research findings are based on the responses
of 2,234 landlords across the UK to one of the RLA’s quarterly surveys.
Key findings
Our research amplifies concerns surrounding the impact of universal credit and
broader welfare reforms on private landlords, specifically regarding rent arrears.
We found that 61% of landlords that let to tenants on Universal Credit have
experienced their UC tenants going into rent arrears in the past 12 months. This
is over double from 27% of landlords in 2016, and a significant increase from the
previous year where it was 38% of landlords.
We found that the amount owed by Universal Credit tenants in rent arrears has
increased by 49% in comparison to the previous 12 months. This has increased
from £1,600.88 in 2017 to £2,390.19.
Rent arrears for Universal Credit tenants are likely to be driving homelessness,
with 28% of landlords regaining possession of their property from a UC tenant
and the primary reason being rent arrears (77% of landlords).
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The significant increase in rent arrears for both UC tenants and ‘legacy’ Housing
Benefit tenants also points to much wider issues than just the implementation of
Universal Credit. The findings suggest that the freeze to LHA rates since 2016
and that LHA rates had not increased with market rents between 2010 and 2016
is likely to be driving the increase in rent arrears for tenants that claim benefits.
53% of landlords have applied for an Alternative Payment Arrangement (APA) in
the past 12 months, with 57% reporting this was successful. However, on average
we found it was taking 9.3 weeks for this to be organised. This is far too long and
is likely to be exacerbating the growing numbers of tenants in rent arrears.
Tenants that claim benefits/Universal Credit are finding it more difficult to find a
home to rent. 62% of landlords reported they were unwilling to let to tenants on
Universal Credit.
Mortgage conditions are a barrier for a proportion of landlords to offer a privately
rented home to tenants that claim benefits (22% of landlords).
The proportion of landlords that have added to their portfolio has continued to
decrease and now stands at 14%, down 13 percentage points since Q3 2016. At
the same time, the proportion of landlords that are selling properties has
continued to increase and now stands at 14%.
More and more landlords are planning to sell properties in the next 12 months.
This now stands at 22% and is up three percentage points since Q3 2016. While,
the proportion of landlords looking to buy properties has continued to decline,
and more landlords are planning to sell than buy. This indicates chronic
undersupply of privately rented homes in the future.
Key Recommendations
The findings of this research provide a greater understanding of the issues facing the
private rented sector and a deeper insight into the attitudes and behaviours of private
landlords. From these findings, we have developed some key recommendations that we
believe will improve the current private rented sector and work to secure a modern
private rented sector of the future that works for all.
1. Universal Credit needs to be paused from further roll-out to monitor the impact
of current changes and to develop the service further to ensure tenants and
landlords are not put in a dangerous financial situation with increasing rent
arrears.
2. Going forward the Alternative Payment Arrangement system needs to be
significantly improved. There are efforts underway to improve this already by the
DWP to move this to an online system. However, it is essential that this is working
well before migration is started from next year.
3. We would recommend that to mitigate risk of rent arrears for claimants, that
Work Coaches and Case Managers ask tenants during the application process if
they need or desire direct payment to landlords from the start of the claim as a
standard question. This could build on the housing confident scheme previously
delivered by DWP.
4. Part of the underlying ethos of Universal Credit is to promote financial
responsibility to claimants. However, a private landlord can only claim rent arrears
back as a 3rd party deduction against the current property where the tenant
6 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
resides. This does pose an issue, given the financial responsibility that the
Government expects of claimants, that when a tenant abandons the property
with rent arrears, that these rent arrears are not deducted from the award. This
does not provide the reassurance for landlords that they will be paid rent and
could be a potential factor influencing landlord unwillingness to let to tenants
claiming Universal Credit. Private landlords should not be expected to absorb
losses (especially at a time of increasing costs and taxation reform), and it would
not be expected that a different business such as a supermarket to absorb any
loses for non-payment for a product. To improve landlord confidence in the
system and to promote financial responsibility, Universal Credit should be
reformed to ensure that any rent arrears accrued can be claimed and taken from
the award, even if the tenant leaves the property where arrears have accrued.
This would provide the much-needed confidence that a landlord will receive rent
payments and not face significant loses when letting to tenants on Universal
Credit.
5. Ahead of managed migration there needs to be a significant communications
initiative with private residential landlords to inform, advise and educate on how
to navigate Universal Credit and how to escalate concerns and complaints when
there is risk of the tenancy breaking down.
6. The current positive partnership working between the DWP and the RLA should
continue to ensure known and emerging issues with the roll-out of Universal
Credit are identified, and concerns and experiences of private landlords are
understood by Government.
7. The increasing rent arrears for housing benefit and universal credit tenants
indicates broader issues in the private rented sector. We believe that the current
LHA freeze needs to be reviewed and lifted urgently, especially with the lifting of
the freeze for social landlords. Not only does this have broad support across the
industry, but it will help to lift tenants out of poverty and decrease the risk of
homelessness for families.
8. There are increasing regulative burdens being placed upon landlords in a
piecemeal fashion. There needs to be a large-scale review of the changes
introduced in the past two years to identify the impact on the development of the
sector. More and more landlords are now planning to sell properties, without
change there is going to be a contraction of the private rented sector. While it may
be the intention of the current government to encourage home ownership, fewer
properties to rent will not support those who cannot afford to buy or seek to rent
due to their circumstances.
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1. Introduction
1.1 Background and Method
The research presented in this report is part of a longitudinal research project being
conducted by the Residential Landlords Association’s (RLA) Private renting Evidence,
Analysis & Research Lab (PEARL) to understand the state of the private rented sector in
the United Kingdom. As part of this project, RLA PEARL conducts four quarterly surveys
of landlords each year, where each survey focuses on changes in different policy areas.
These are Finance and Investment, Property Conditions and Energy Efficiency, Welfare
Reform and Homelessness, and Regulation and Enforcement. This report presents the
research relating to the Welfare Reform and Homelessness survey of 2018. The principal
aim of the present study was to examine the effect of welfare reforms on the private
rented sector, including but not exclusively the impact of universal credit on landlords
and the broader sector. A further aim of the research was to monitor and analyse key
trends across the private rented sector.
The findings of this report are based on a survey that received 2,234 total responses
from landlords across the UK in Spring 2018. To recruit participants for this survey an
opportunity sampling approach was utilised to ensure a large representative sample of
landlords was drawn upon. This approach included contacting the RLA’s database of
landlords (including over 30,000 members and associate members, and over 35,000 RLA
non-member service users) with an email requesting participation in the research. The
landlords were sent a further two direct emails over the course of 8 weeks. The research
was also advertised to the wider landlord community across multiple third-party
websites, advertised on the RLA website, the RLA Campaigns and News Centre, and was
advertised on social media by the RLA and partner organisations.
These sampling methods were used to ensure the opportunity to take part in the
research was available to as many landlords as possible. However, there are some
limitations over using an opportunity sampling approach that needs to be highlighted, as
with all sampling approaches there is the possibility of introducing bias. As the survey and
associated advertising were online, this could have biased the sample and excluded
those who do not use a computer regularly or have limited access to the internet. While
we are currently making progress in identifying trends in demographics of landlords
across the sector, there is still very little known about the general demographics of
landlords across the sector, and because of this, it is not possible to demonstrate
whether this sample is truly representative of all landlords. This should be taken into
account when interpreting the results. The size of the sample in this instance and the
multiple streams of attracting participants provides us with confidence that a wide
spectrum of the sector is represented in the sample. A further caveat that should be
noted, is the report refers to ‘landlords’, this is done regarding expediency and should be
viewed and interpreted as ‘landlords sampled’.
This research helps the RLA to develop essential insights into the issues affecting the
sector, and the survey covered a range of topics. This included demographics of tenants,
landlords and their properties. This survey included a number of questions relating to
Universal Credit, Welfare Reform, and longer-term tenancies. Finally, the survey
included key trend questions carried over from previous surveys enabling us to track and
monitor important data longitudinally.
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The findings of this research help to provide foundations for the RLA’s campaigning to
make renting better for all. We also anticipate that this research will provide the
opportunity for evidence-based decisions by policy-makers and a more in-depth
understanding of landlords, tenants and the private rented sector in general by
journalists, academics, and the wider public.
1.2 Structure of the Report
This section of the report has provided the background to this research and the
methodology used to collect the data. The next section of the report explores the
continued roll-out of Universal Credit and the impact on the private rented sector.
Following this, the key trends are examined and investigated, and then we further
explore the issues of welfare reform in the private rented sector, including analysis on
general attitudes towards welfare reform but also local housing allowance rates. The
next section then reports on landlord perceptions and practice towards longer-term
tenancies. Finally, the next sections of the report then present the findings relating to
the demographics of the landlords who participated in the research, the types of tenants
whom the landlord lets to, and the types of properties that form the landlords’ portfolio.
2. Examining the
Impact of Universal
Credit on Private
Renting
PEARL
10 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
2. Examining the Impact of Universal Credit on Private
Renting
Universal Credit is continuing to be rolled out across the UK. Our previous research
identified that the private rented sector is struggling with this rollout, with a significant
proportion of landlords experiencing their Universal Credit tenants going into rent
arrears (Simcock, 2017b). While in the previous quarterly survey, Universal Credit and
Housing Benefit questions were grouped, the rollout of Universal Credit has now reached
a point where these questions can be separated. In this section of this report, we
examine the continuing trends of how Universal Credit is impacting private landlords,
and we compare the findings with our previous research to examine longer-term trends.
Key findings:
21% of landlords reported they let to tenants on Universal Credit
61% of landlords have experienced their Universal Credit tenants going into rent
arrears in the past 12 months. This has more than doubled in the past 2-years.
Landlords were owed on average £2,390.19 in rent arrears
53% of landlords had requested an Alternative Payment Arrangement, and 57%
reported that this had been successful
On average it took 9.3 weeks for the arrangement to be organised
28% of landlords reported they had to evict a tenant on universal credit in the past
12 months, with the primary reason being rent arrears (77% of landlords)
Respondents were presented with a question to determine whether they currently let to
or have let to tenants in the past 12 months on Universal Credit. This question acted as
a filter question, with those landlords who responded that they did or were not sure, were
then filtered to the following Universal Credit questions. Overall, 21% of landlords
reported letting to tenants on Universal Credit, with a further 8% reported they were not
sure. Interestingly, 6% of landlords reported that Universal Credit had not been rolled
out to their area.
11 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 2.1. The proportion of landlords whose tenants on universal credit have gone into
rent arrears
The proportion of landlords who have experienced their tenants on universal credit going
into rent arrears in the past 12 months has increased from 38% in 2017 to 61% of
landlords (see figure 2.1 and figure 2.2). Respondents were then asked to provide how
much in total they were or had been owed by these tenants. On average, landlords were
owed £2,390.19 (Median=£1,300, SD=3994.75, N=345). This is a 49% increase on the
previous year and is 254% higher than the current average monthly rent across England
(VOA, 2018).
Figure 2.2. The proportion of landlords that have experienced their Universal Credit
tenants going into rent arrears in the past 12 months
61%
39%
0%
10%
20%
30%
40%
50%
60%
70%
Yes No
In the past 12 months, have you experienced your Universal Credit tenants going into rent
arrears? (N=538)
27%
38%
61%
0%
10%
20%
30%
40%
50%
60%
70%
2016 2017 2018
Proportion of landlords that have experienced their tenants on Universal Credit going into rent
arrears in the past 12 months
12 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 2.2 above displays the annual change in the proportion of landlords that have
experienced rent arrears with their Universal Credit tenants. In 2016, 27% of landlords
reported that their tenants on Universal Credit had gone into rent arrears, this had more
than doubled to 61% of landlords over a two-year period.
Figure 2.3. The proportion of landlords that ask for a Guarantor and/or Deposit when
letting to a tenant on Universal Credit
We asked respondents whether they asked for a guarantor or deposit when letting to a
tenant on Universal Credit. 82% of landlords reported they asked for a deposit, while
52% reported they asked for a guarantor.
52%
82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Guarantor Deposit
Guarantor Deposit
13 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 2.4. Landlords experiences of applying for an Alternative Payment Arrangement
(APA)
53% of landlords reported that they had requested an Alternative Payment
Arrangement (APA), and of these, 57% reported that it had been successful.
Furthermore, 53% of landlords reported that they had included a claim for the
repayment of rent arrears in the APA. The full findings are available in figure 2.4 above.
Respondents were then asked how easy they had found the APA application process,
51% of landlords reported they had found it difficult or very difficult. The findings can be
found in figure 2.5 below.
Figure 2.5. Landlord experiences of the APA application process
53%
57%
53%
47%
43%
47%
0%
10%
20%
30%
40%
50%
60%
Have you requested an
Alternative Payment Arrangement
(APA) for direct payment to the
Landlord? (N=509)
If yes, was this request
successful? (N=301)
If you requested an APA, did you
include a claim for repayment of
rent arrears? (N=312)
Yes No
3%
10%
36%
23%
28%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Very easy Easy Neutral Difficult Very difficult
How easy did you find the APA application process? (N=301)
14 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Respondents were asked how long on average it took them to have the APA arranged.
On average, landlords reported that it took 9.3 weeks for direct payment under the APA
to be arranged, with the maximum reported to be a full year (N=260).
Figure 2.6. The proportion of landlords who found that the Department for Work and
Pensions team helpful
Of those landlords that reported they had contacted the DWP for assistance with their
Universal Credit tenant, 43% had found them unhelpful or very unhelpful. The full
findings are available in figure 2.6 above.
Figure 2.7. The proportion of landlords that have evicted a tenant who was in receipt of
Universal Credit
5%
11%
42%
25%
18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Very helpful Helpful Neutral Unhelpful Very unhelpful
If you have contacted the DWP, how helpful were the team? (N=315)
28%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Yes No
In the past 12 months, have you evicted a tenant who was in recepit of Universal Credit? (N=501)
15 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
28% of landlords reported that they had to regain possession of a property from a tenant
who received Universal Credit. Respondents were then asked for the primary cause for
regaining possession of the property. From the analysis of the data, the leading cause of
eviction for Universal Credit tenants was rent arrears, with 77% of landlords reporting
this was the main reason. This was followed by damage to the property by the tenant
(6%) and also the landlord selling the property (6%). The full findings are available in figure
2.8 below.
Figure 2.8. Primary reasons for regaining the property from a tenant on Universal Credit
6%
1%
1%
6%
5%
77%
2%
1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
I am selling the property
I wanted to make substantial renovations to the
property
The tenant(s) asked me to make repairs
Damage to the property by the tenant
Anti-social behaviour by the tenant
Rent arrears
Illegal behaviour by the tenants
I wanted to increase the rents and the tenants
refused to pay a higher rate
If you answered yes to the above question, what was your primary reason for regaining possession
of the property from the tenant? (N=175)
3. Key Trends in
the Private Rented
Sector
PEARL
17 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
3. Key Trends in the Private Rented Sector
In this section of this research report, we provide an analysis of the key trends in the
private rented sector. This includes an analysis of how plans to change the size of
property portfolios have changed, planned changes to rent, and changes in tenant
demand. The findings of this survey are also analysed in comparison to the findings of
previous quarterly surveys that we have conducted; this enables in-depth analysis of
how attitudes and behaviours of landlords are changing in the sector over time.
Our key findings are:
The proportion of landlords who have added to their portfolio in the past 12
months is continuing to decline and now stands at 14%, down 13 percentage
points since Q3 2016
The proportion of landlords who have sold properties is now at 14%, up two
percentage points on the previous quarter
The proportion of landlords that plan to sell properties now stands at 22%, up
three percentage points since Q3 2016
More landlords are planning to sell properties than buying properties, potentially
meaning that a future under-supply of privately rented homes
84% of landlords reported stable or increased tenant demand for privately rented
properties
The proportion of landlords reported they were not confident in the sector has
continued to decline, and now stands at 25% (1-in-4 landlords), down from 32%
in Q3 2017.
The proportion of landlords who have kept the rents the same has continued to
increase and now stands at 57% of landlords.
The proportion of landlords that plan to increase rents has remained flat on the
previous quarter and remains at 41% of landlords
The most common reason for future rent increases was because of the changes
to Mortgage Interest Relief (28%)
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3.1 Trends in Landlord Portfolios
We have included in each quarterly survey of this longitudinal research project a number
of key trend questions relating to both landlords’ portfolios and rents. The analysis of the
findings of these questions is showing a downbeat attitude towards the private rented
sector from private residential property investors.
Since the first quarterly survey in Q3 2016, there has been a significant decline in the
proportion of landlords that have bought additional properties. This has decreased from
27% at the end of 2016 to 14% at the start of 2018, a 13-percentage point decrease, and
is now equal to the same proportion of landlords that have sold properties.
Over the same period, there has been a gradual increase in the proportion of landlords
that have sold properties in the past 12 months. This has increased from 9% in Q3 2016
to 14% in Q1 2018, a full five-percentage-point increase. The full findings of this question
and the comparison to the previous quarterly surveys can be identified in figure 3.1
below.
Figure 3.1. Quarterly changes to landlord property portfolios
The next set of questions looked to understand the landlord’s plans for their portfolio
and asked whether they were looking to sell properties, buy properties or keep their
portfolio the same. The proportion of landlords that are planning to keep their portfolio
the same has remained relatively consistent across the past quarterly surveys and this
quarter has been the same.
27%
20% 19% 18% 16%
14%
64%
69% 71% 70% 72%
72%
9% 11% 11% 13% 12%
14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Q3 2016
(N=2,695)
Q1 2017
(N=2,749)
Q2 2017
(N=2,644)
Q3 2017
(N=3,084)
Q4 2017
(N=2,584)
Q1 2018
(N=2,091)
Bought at least 1 property Kept portfolio the same Sold at least one property
19 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
In contrast, the proportion of landlords that are planning to sell properties has increased
from 19% in Q3 2016 (Simcock, 2016) to 22% in Q1 2018, a rise of three percentage
points. However, in comparison to the previous quarter, this is a one-percentage point
decrease. At the same time, the proportion of landlords that plan to buy properties has
decreased from 20% in the same period to 16%, a decrease of four percentage points. In
comparison to the previous quarter, the proportion of landlords that are looking to buy
additional properties in the next 12 months has remained flat. Overall, there is now a 6-
percentage point difference in between the proportion of landlords planning to sell and
buy, indicating a net loss of properties from the private rented sector. The full findings
of this question and the quarterly comparison to the previous year can be found in figure
3.2 below.
Figure 3.2. Quarterly changes in landlord plans for their portfolios
19% 22%
20%
22% 23%
22%
61% 61% 61% 60% 60% 62%
20% 18% 19% 18%
16%
16%
0%
10%
20%
30%
40%
50%
60%
70%
Q3 2016 (N=
2,883)
Q1 2017 (N=
2,750)
Q2 2017 (N=
2,641)
Q3 2017 (N=
3,061)
Q4 2017
(N=2,596)
Q1 2018
(N=2,092)
Plan to sell at least 1 property Plan to keep their portfolio the same
Plan to buy at least 1 property
20 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 3.3. Quarterly changes in reported tenant demand for private rented properties
In the most recent quarter surveyed, the majority of landlords (84%) reported that they
had experienced either stable or increasing tenant demand for private rented properties.
This has remained flat in comparison to the previous quarter. Over the past five quarters,
the findings of our research show that the proportion of landlords reporting that demand
is increasing or stable has remained relatively consistent. However, over the course of
12 months, the proportion of landlords that have experienced tenant demand
decreasing has increased by four percentage points and now is at 16% of landlords.
12% 15% 15% 15%
16%
55% 56% 55% 58%
55%
33% 28% 30%
26% 29%
0%
10%
20%
30%
40%
50%
60%
70%
Q1 2017 (N= 2,670) Q2 2017 (N= 2,530) Q3 2017 (N= 2,989) Q4 2017 (N=2,504) Q1 2018 (N=2,004)
Decreased Stable Increased
21 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 3.4. Quarterly comparison of landlord confidence in the private rented sector for
the next 12 months
In Q1 2018, landlord confidence in the sector has somewhat improved in comparison to
the previous quarters. The proportion of landlords that are not confident in the sector
has decreased over the past six months, from 32% of landlords to now 25% of landlords.
While the proportion of landlords that reported they were confident decreased between
Q2 and Q3 2017, this has now started to increase gradually, and has increased by two
percentage points between Q4 2017 and Q1 2018, with 37% of landlords reported they
were confident about the state of the sector for the next 12 months. The findings show
that there is a 12-percentage point difference between the proportion of landlords that
are not confident and those that are confident.
28% 26%
32%
28% 25%
34% 36% 34%
37%
36%
38% 39%
35%
35%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q1 2017 (N= 2,771) Q2 2017 (N= 2,693) Q3 2017 (N= 3,134) Q4 2017 (N=2,632) Q1 2018 (N=2,115)
Not confident Neutral Confident
22 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
3.2 Trends in Rents
While the proportion of landlords that had increased their rents had remained relatively
flat over the first part of 2017, this has now started to decline. In comparison to the
previous year, the proportion of landlords that had increased their rents is down five-
percentage points and now stands at 38% of landlords. At the same time, the proportion
of landlords that have kept their rents the same has increased and has risen by four
percentage points between Q1 2017 and Q1 2018. In this quarter, the proportion of
landlords who have kept the rent the same is now 19 percentage points above those who
raised the rents. The full findings and comparison to the previous quarterly surveys can
be found in figure 3.5 below.
Figure 3.5. Quarterly changes in the proportion of landlords changing their rent levels in
the past 12 months
4% 4% 5% 5% 6%
53% 54% 52% 54% 57%
43% 42% 43%
41% 38%
0%
10%
20%
30%
40%
50%
60%
Q1 2017 (N= 2,755 ) Q2 2017 (N= 2,671 ) Q3 2017 (N= 3,106 ) Q4 2017 (N= 2,616) Q1 2018 (N=2,097)
Decreased Rents Kept rents the same Increased rents
23 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 3.6. The primary reasons why landlords had increased rents in the past 12 months
When asked for the primary reasons why landlords had increased their rents in the past
12 months, the most selected reason was to keep the rent in line with market rents (31%)
followed by because of the changes to Mortgage Interest Relief (21%). This was then
followed by so the landlord could meet increasing costs (17%). The findings are showing
that landlords have increased rents due to multiple factors, but importantly just over 1-
in-5 landlords reported increasing the rents due to the changes to mortgage interest
relief. This finding is surprising since our previous research identified that the majority of
landlords would be negatively impacted by the changes to mortgage interest relief
(Simcock, 2016, 2018b). However, it is important to note that these findings are during
the four-year phasing in of the mortgage interest changes. Therefore, it is likely that
landlords will be making changes over the four-year period in regards to the broader
economic circumstances, the impact on their own letting business, and the current
market they operate within. The full findings can be displayed in figure 3.6 above.
1%
2%
2%
2%
10%
17%
11%
31%
21%
0% 5% 10% 15% 20% 25% 30% 35%
To help my tenants
To keep my rents competitive
I was advised to do so
So I can make improvements to the property
Because it has been a while since I increased rents
So I can meet increasing costs
Because it is a new tenancy
To keep the rent in line with market rents
Because of the changes to Mortgage Interest Relief
The primary reasons why landlords had increased rents in the past 12 months (N=775)
24 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 3.7. Quarterly changes in landlord plans for the rent over the next 12 months
The final part of this section investigates landlords plans for rent levels over the next 12
months. There have been considerable changes in landlord plans for the rents since we
started this quarterly survey programme in Q3 2016. Over the course of 2017, the
proportion of landlords that planned to increase the rents decreased from 56% in Q3
2016 to 45% in Q2 2017 (Simcock, 2017a). This then increased by four percentage points
in the following quarter and the gap between those planning to increase the rents and
those planning to keep the rents the same closed to a one-percentage-point gap
(Simcock, 2018b). In the next quarter, this gap significantly accentuated with a 17-
percentage point difference, with 41% of landlords planning to increase the rents, the
lowest proportion since data was started to be collected (Simcock, 2018a). In this
quarter, the proportion of landlords that plan to keep the rents the same, that plan to
increase rents and the proportion that plan to decrease rents has remained flat in
comparison to the previous quarter. The findings indicate that landlords are seeking to
maintain stability across their portfolios, especially in the current period of economic and
political uncertainty, and this is likely to help them avoid any void periods and
unnecessary costs. The full findings can be seen in figure 3.7 above.
56%
47% 45%
50%
41%
41%
43%
53% 55%
49%
58%
58%
1% 1% 1% 1%
1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
Q3 2016 (N=
2,483)
Q1 2017 (N=
2,736)
Q2 2017 (N=
2,514)
Q3 2017 (N=
2,860)
Q4 2017 (N=
2,345)
Q1 2018
(N=1,969)
Increase the rent Keep the rent the same Decrease the rent
25 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 3.8. Primary reasons for landlords increasing rents in the next 12 months
The above figure (3.8) displays the primary reasons why landlords will be increasing rents
in the next 12 months. The most common reason why landlords would be increasing the
rents they charge was because of the government changes to mortgage interest relief.
This is expected to continue being one of the most common reasons over the next few
years until 2021 due to the phasing in of the tax changes, and specifically as our previous
research found that 62% of landlords reported their profitability would be reduced by at
least 20% due to the tax changes (Simcock, 2018b). The second most common reason
was for the landlord to keep the rents in line with market rent (24%), and this was followed
by so the landlord can meet increasing costs (19%).
1%
2%
3%
3%
15%
19%
24%
29%
0% 5% 10% 15% 20% 25% 30% 35%
I was advised to do so
To keep my rents competitive
So I can make improvements to the property
Because it is a new tenancy
Because it has been a while since I increased rents
So I can meet increasing costs
In line with market rent
Because of the changes to Mortgage Interest Relief
If you plan to increase rents in the next 12 months, what is your reason for doing this? (N= 794)
26 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 3.9. Primary reasons for landlords keeping rents the same in the next 12 months
In figure 3.7, it was identified that 58% of landlords were planning on keeping the rent the
same for the next 12 months. The most common reason landlords provided was to keep
their tenant in the property for the long-term (66%). This shows that the majority of
landlords are looking for stability in their property business and keeping a tenant for the
longer-term helps to minimise void periods and unnecessary costs. This suggests that
voluntary longer-term tenancies (with appropriate tax relief to encourage take-up) could
be beneficial for a proportion of landlords and support those tenants who are looking for
a longer-term home in the private rented sector. The full findings can be identified in
figure 3.9 above.
63%
68%
77%
75%
66%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Q1 2017 (N=1,386) Q2 2017 (N=1,309) Q3 2017 (N= 1,349) Q4 2017 (N=1,201) Q1 2018 (N=1,090)
To help my tenant
I have no reason to do so
My costs have not increased
To keep the tenant in my property for the long term
4. Welfare Reform
and the Private
Rented Sector
PEARL
28 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
4. Welfare Reform and the Private Rented Sector
This section of the report explores how welfare reform has impacted the private rented
sector. The first part of this section investigates landlord’s experiences of Local Housing
Allowance/Housing Benefit administered by local authorities. This provides a unique
opportunity to compare the impact against the roll-out of universal credit. The second
part of this section probes landlord attitudes towards welfare reform and the impact of
recent policy changes on letting strategies.
Key findings:
36% of landlords reported they had let to or currently let to tenants on housing
benefit/local housing allowance
56% of landlords experienced a tenant on housing benefit going into rent arrears
in the past 12 months
30% of landlords reported they had evicted a tenant who was in receipt of housing
benefit/local housing allowance in the past 12 months
The primary reason for regaining possession of the property from these tenant
groups was rent arrears (65% of landlords)
62% of landlords reported they were unwilling to let to tenants on universal credit
49% of landlords reported the tax changes meant they were now less likely to let
to homeless people or those on benefits
22% of landlords reported that they had mortgage conditions that prevented
them from letting to tenants claiming benefits or universal credit
29 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
4.1 Landlord Experiences of Local Housing Allowance & Housing Benefit
For this section of the survey, we presented filter questions to landlords to identify those
landlords that have or do let to tenants on Housing Benefit. From the sample, 36% of
landlords reported they had or do let to tenants on housing benefit/local housing
allowance in the past 12 months. This acted as a filter question, and the following
questions in this part of the report were only displayed to those landlords who reported
yes.
Figure 4.1. The proportion of landlords that let to tenants on Housing Benefit/Local
Housing Allowance (not Universal Credit)
Figure 4.2. The proportion of landlords that have experienced their tenants on housing
benefit going into rent arrears
36%
60%
5%
0%
10%
20%
30%
40%
50%
60%
70%
Yes No Not sure
Do you or have you let to tenants on Housing Benefit/Local Housing Allowance (not Universal
Credit) in the past 12 months?
56%
45%
0%
10%
20%
30%
40%
50%
60%
Yes No
In the past 12 months, have you experienced your housing benefit tenants going into rent
arrears? (N=726)
30 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
56% of landlords reported that they had experienced their tenants on housing benefits
going into rent arrears in the past 12 months. The full findings are available in figure 4.2
above. Landlords were then asked on average how much they were owed by these
tenants in rent arrears. On average, landlords reported being owed £1,842 (Median =
£1,000, N=410). This is 23% below the average amount owed to landlords with tenants
on Universal Credit.
Figure 4.3. The proportion of landlords that ask for a guarantor or deposit when letting
to a tenant on LHA/HB
Landlords were then asked if they asked for a guarantor or a deposit when they let to
LHA/HB tenants. 53% reported they asked for guarantors, while 85% reported they
asked for a deposit.
Figure 4.4. The proportion of landlords that have evicted a tenant who was in receipt of
Local Housing Allowance/Housing Benefits in the past 12 months
53%
85%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Guarantor Deposit
Do you ask for any of the following when letting to a LHA/HB tenant? (N=553)
30%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Yes No
In the past 12 months, have you evicted a tenant who was in receipt of Local Housing
Allowance/Housing Benefits? (N=708)
31 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
A majority of landlords reported they had not evicted a tenant who was in receipt of
LHA/HB in the past 12 months (70%). However, of those that had done so (30% of
landlords), the main reason was identified as rent arrears (65% of landlords), followed by
anti-social behaviour (12%) and then the landlord selling the property (9%). The full
findings are available in figure 4.5 below.
Figure 4.5. The primary reason for landlords to regain possession of properties from
tenants that were in receipt of Housing benefits in the past 12 months
0%
3%
2%
3%
8%
9%
12%
65%
0% 10% 20% 30% 40% 50% 60% 70%
The tenant(s) asked me to make repairs
I wanted to make substantial renovations to the
property
I wanted to increase rents and the tenants refused
to pay a higher rate
Illegal behaviour by the tenants
Damage to the property by the tenant
I am selling the property
Anti-social behaviour by the tenants
Rent arrears
What was your primary reason for regaining possession of the property from the tenant? (N=233)
32 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
4.2 Policy changes and the impact on letting strategies
This section of the report investigates landlord attitudes and their letting strategies in
response to recent policy changes. In figure 4.6 below, we explore how willing landlords
are to let to tenants who have been homeless, are on housing benefit, or universal
credit. The findings show that the majority of landlords are in general unwilling to let to
these tenant types. 66% of landlords reported that are currently unwilling to let to
homeless people, while 62% of landlords reported that they are currently unwilling to
let to people who are on universal credit. The full findings are available in figure 4.6
below.
Figure 4.6. Landlord willingness to let to tenants on benefits, universal credit or those
that are currently homeless
43%
23% 22%
8%
3%
38%
24% 23%
12%
3%
31%
21% 21% 21%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Strongly disagree Disagree Neither agree nor
disagree
Agree Strongly agree
I am willing to let to homeless people
I am willing to let to people on Universal Credit
I am willing to let to people on Local Housing Benefit
33 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 4.7. Policy changes and the impact on landlord willingness to let to homeless
people and people in receipt of benefits
The above figure explores the direct impact of policy changes on landlord willingness to
let to homeless people or people in receipt of benefits. Our findings show that each
policy change has caused a significant proportion of landlords to be unwilling to let to
these tenant groups. The policy change with the highest proportion was the 4-year
freeze of Housing Benefit payments, with 55% of landlords, followed by the caps on Local
Housing Allowance (LHA) rates, with 53% of landlords reporting they were less likely to
let to these tenant groups because of this policy.
53% 55%
50% 49%
43% 41%
46% 47%
4% 4% 4% 4%
0%
10%
20%
30%
40%
50%
60%
Caps on Local Housing
Allowance (LHA) rates
(N=1,837)
4 year freeze of Housing
Benefit (HB) payments to
working age claimants
(N=1,893)
Increased regulation
(right to rent checks,
licensing, etc) (N=1,825)
Taxation changes
(removal of Mortgage
Interest Relief etc)
(N=1,888)
Less Likely No Change More Likely
34 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 4.8. The proportion of landlords with mortgage conditions that prevent them
from letting to tenants on benefits/universal credit
The final question of this section explores whether landlords have mortgage conditions
that prevent them from letting to tenants who claim benefits or universal credit. The
majority of landlords reported they did not have any conditions (57%), while only 22% of
landlords reported they had conditions that prevented them. This is still a large
proportion of landlords, and this means that some private rented homes are inaccessible
for the most vulnerable due to these conditions imposed on the landlord.
22%
57%
21%
0%
10%
20%
30%
40%
50%
60%
Yes No Not sure
Do mortgage conditions prevent you from renting out to tenants claiming benefits and/or
universal credit? (N=1,966)
5. Practice &
Perceptions of
Tenancy Lengths in
the PRS
PEARL
36 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
5. Practice & Perceptions of Tenancy Lengths in the PRS
This section of the report examines the current practices of landlords toward tenancy
lengths and their attitudes towards the provision of longer-term tenancies. The issue
around security of tenure and tenancy length is growing in the UK. Previous research has
identified that the English tenancy model is at one end of the spectrum in comparison to
international private rented sectors, and recommended that a voluntary longer-term
tenancy system could be beneficial to both landlords and tenants (Whitehead & Williams,
2018). Subsequently, the UK Government has announced a consultation regarding the
current barriers to longer-term tenancies in the private rented sector (MHCLG, 2018b),
highlighting the current political focus on the security of tenure.
Key findings:
The majority of landlords initially offer a 6-month tenancy (60%)
A small minority of landlords reported they offered a shorter tenancy length due
to a request by tenants (14%)
While 36% of landlords reported they offered the shorter tenancy to protect
themselves due to previous bad experiences. This indicates that landlords do not
have faith in the current justice system in order to recover possession effectively
if the tenant is in the property for the long-term and the situation turns negative
33% of landlords reported being asked for a longer tenancy, with on average being
asked for a 2-year tenancy
61% of landlords reported they would currently be unlikely to offer a three year or
more tenancy agreement to a tenant
37 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 5.1. Initial tenancy lengths usually offered by a landlord
The majority of landlords (97%) reported that they usually offered a 6 or 12-month
tenancy initially at the start of a tenancy. The full findings are available in figure 5.1 above.
The respondents were then asked about the current barriers to providing a longer-term
tenancy. A large proportion of landlords (49%) reported that it was standard practice and
they had never thought of offering a tenancy longer than 12 months, while in contrast,
14% of landlords reported that the tenant had requested a shorter tenancy length. 36%
of landlords reported that they do not typically offer a longer tenancy due to previous
bad experiences, and so offer a shorter tenancy for their own security. This finding
suggests that landlords lack confidence in their current ability to regain possession of
their property effectively if the relationship between the tenant and landlord
deteriorates (for example, through rent arrears or damage to the property by the
tenant). Therefore, reform to the current section 8 process and a new housing court may
act as an incentive to offering longer-term tenancies.
Figure 5.2. Current barriers to landlords offering longer-term tenancies
60%
37%
1% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
6 months 12 months 18 months 24 months More than 24
months
At the start of a tenancy, what length of tenancy do you usually offer? (N=2,027)
49%
12%
36%
14%
0%
10%
20%
30%
40%
50%
60%
Standard practice - never
thought of offering longer
tenancies
Mortgage / Insurance
Restrictions
Previous bad experiences
with a tenant - shorter for
my safety
Shorter tenancy length
requested by the tenant
If you don't normally offer tenancies longer than 12 months, why is this? (N=1,837)
38 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 5.3.The proportion of landlords that have been asked for a longer tenancy by a
tenant or prospective tenant
33% of landlords reported that they had been asked for a longer tenancy by a tenant or a
prospective tenant. Landlords were then asked to provide the length of the tenancy
agreement that was requested. On average, landlords were asked for a 2-year tenancy
agreement, with the minimum length requested as nine months up to a maximum of an
indefinite tenancy (N=747). Of which 58% of landlords accepted the proposed tenancy
length, while 42% reported they did not (N=790). The majority of landlords (61%)
reported they currently are unlikely to offer a tenancy of 3 years or more to tenants,
suggesting further changes are needed to incentivise landlords to do so.
Figure 5.4. Likelihood of landlords to offer a tenancy of 3 years or longer to a tenant
33%
67%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Yes No
Have you ever been asked for a longer tenancy by a tenant or prospective tenant? (N=2,008)
39%
22%
18%
16%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Extremely unlikely Unlikely Neutral Likely Extremely likely
How likely are you to offer a tenancy of 3 years or longer to tenants? (N=2,017)
6. Who are
Landlords?
PEARL
40 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
6. Who are Landlords?
In this section of this research report, we analyse the types of landlords present in the
private rented sector. We examine the demographics of landlords, such as age, gender,
but also, how the landlord first entered the PRS, how long they have been a landlord and
the size of portfolios across the sector.
Our key findings are:
Most landlords are between the ages of 55 to 64 (35%), followed by 45 to 54 (26%)
and 65 to 74 (26%)
44% of landlords reported they owned their own home with a mortgage, while
52% reported they owned the property outright
The most common employment status of landlords was retired (31%) followed by
working full-time (24%)
16% of landlords classified themselves as full-time landlords
The most common reason for becoming a landlord was their own choice through
borrowing money, such as buy-to-let (35% of landlords)
A large proportion of landlords described themselves as specialising in letting to
families (50% of landlords)
Most landlords had been providing homes for over ten years (65%)
The following figure shows the age profile of the landlords who responded to the survey.
The largest age group are landlords between the ages of 55 to 64 (35% of the sample),
while the smallest age group are landlords aged between 18 to 24 (0% of the sample).
Figure 6.1. Private Landlord Age Profiles and Gender
From the sample, there is a gender gap in response rates, with 59% of respondents
describing themselves as Male, and 41% as Female. The findings are shown in figure 6.1
above.
0% 1%
8%
26%
35%
26%
4%
59%
41%
0%
10%
20%
30%
40%
50%
60%
70%
18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 or
older
Male Female
Landlord Age Profiles (N=1,951) Landlord Gender (N=1,930)
41 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
The most common area where respondents lived was in the South East (20%), followed
by the North West (13%), London (12%) and the South West (12%). The findings are
displayed in the figure below.
Figure 6.2. Location of landlord’s primary residence
When asked about the tenure of their own main home, 44% of the sample reported they
own their own home with a mortgage, and 52% reported they owned their property
outright. The findings are shown in the figure below.
Figure 6.3. Tenure of Landlords main home
The most common employment status was landlords describing themselves as retired
(31% of the sample), followed by being working full-time (24% of the sample). The
findings can be found in figure 6.4 below.
4%
13%
10%
7%
6%
6%
12%
20%
12%
6%
1%
0.15%
0% 5% 10% 15% 20% 25%
North East
North West
Yorkshire and the Humber
East Midlands
West Midlands
East of England
London
South East
South West
Wales
Scotland
Northern Ireland
Landlord Location (N=1,967)
52%
44%
2% 0.15%
0%
10%
20%
30%
40%
50%
60%
Own - outright Own - with a mortgage Rent - Private Landlord Rent - Local
Authority/Housing
Association
Tenure of Landlords main home (N=1,950)
42 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 6.4. Landlord Employment Status
The following figure explores the reasons behind the respondent first becoming a
landlord. The most common reason why landlords first entered the sector was through
their own choice and by borrowing money such as through a buy-to-let mortgage (33%
of the sample). The findings are displayed in figure 6.5 below.
Figure 6.5. The primary reason for first becoming a landlord
A large proportion of landlords reported that they specialised in providing
accommodation for families (50% of the sample), followed by specialising in young
professionals (45% of the sample). The full findings are available in figure 6.6 below.
24%
10%
1%
0.10%
31%
16%
16%
0% 5% 10% 15% 20% 25% 30% 35%
Working full-time
Working part-time
Unemployed/Not working
Student
Retired
Full-time landlord
Self-employed
Landlord Employment Status (N=1,965)
7%
35%
21%
21%
5%
3%
0% 10% 20% 30% 40%
Inherited property
Own choice - borrowed money (i.e. buy-to-let)
Own choice - used savings
Own choice - mix of savings and borrowed money
Spare home from marriage/partnership
Own choice - bought property for family member
and kept when no longer required
How did you first become a landlord? (N=1,967)
43 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 6.6. Landlord portfolio specialisms
Figure 6.7. Length of time as a landlord
A majority of the respondents reported that they had been landlords for more than ten
years (65%), while only 1% have been a landlord for less than one year, and 7% of the
sample have been landlords three years and less. Due to the large proportion of landlords
that have been in the sector for an extended period and when taken into account the
large proportion of landlords that are over the age of 55, there needs to be a
consideration of the incentives for younger generations to enter the private rented
sector, but there also needs to be consideration of what landlords plans for longer-term
portfolio management are. Will these properties be sold, or passed down to children?
Moreover, how will standards be maintained if there is a large influx of relatively
inexperienced landlords entering the sector?
15%
13%
16%
7%
29%
50%
5%
12%
11%
3%
2%
4%
44%
9%
0% 10% 20% 30% 40% 50% 60%
Tenants on benefits
Students
HMOs
High end lets
Apartments/flats
Families
Rural properties
City properties
Tenants aged 55+
Immigrants
Temporary Accomodation
Regulated Tenancies
Young Professionals
House-share
Landlord Specialisms (N=1,685)
1%
6%
10%
18%
65%
0%
10%
20%
30%
40%
50%
60%
70%
Less than 1 year Between 1 and 3
years
Between 3 and 5
years
Between 5 and 10
years
More than 10 years
Length of time as a Landlord (N=1,973)
7. Who are Tenants?
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45 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
7. Who are Tenants?
In this section of this research report, we analyse the types of tenant landlords are
renting their properties out to. We focus on the demographics of tenants, including age,
employment status, and also the relationship between the landlord and tenant and any
tenant issues landlords have.
Our key findings are:
The majority of landlords reported letting to tenants aged between 25 and 34
(68%), followed by 35 to 44 (61%). While 23% of landlords reported letting to
tenants over the age of 65
A majority of landlords reported letting to tenants who were in full-time
employment (87%), while just over 1-in-4 landlords reported to letting to tenants
on benefits
Over one-third of landlords (36%) have experienced tenants going into 2 or more
months of rent arrears in the past 12 months
Over 1 in 4 landlords (32%) have needed to attempt to regain possession of their
property
Out of those attempting to regain possession, 60% of landlords reported that
this was because of rent arrears
On average, per property, landlords are currently owed £1,584.93 in rent arrears
In figure 7.1 below, we can identify the most common tenant age profile for the sample
as aged between 25 and 34 (68% of landlords). The second largest tenant age profile was
35 to 44-year olds, with 61% of landlords reporting they let to this group of tenants.
Figure 7.1. Age profiles of tenants
28%
68%
61%
44%
29%
17%
6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 or older
Age of tenants (N=2,217)
46 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
The most common tenant employment status was employed full-time (87% of
landlords), followed by employed part-time (36%) and then not working claiming benefits
(32%). The figure below shows the different employment statuses of tenants currently
let to by the sample.
Figure 7.2. Employment status of tenants
In the following question, the respondents were asked if they had experienced any issues
with their tenant in the past 12 months. The results indicate that 36% of landlords had
experienced 2 or more months of rent arrears in the past 12 months, and 23% of
landlords had experienced damage to their property. The figure below provides an
overview of the issues experienced by landlords.
Figure 7.3. Landlords negative experiences of letting in the past 12 months
87%
36%
16%
21%
8%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Employed - Full-
time
Employed - Part-
time
Student Retired Not working Not working -
claiming
benefits
Employment status of tenants (N=2,225)
36%
16%
10%
17%
12%
6%
23%
8%
2%
50%
0% 10% 20% 30% 40% 50% 60%
Tenant in arrears (2 or more months)
Anti-social behaviour - Noise
Anti-social behaviour - Threatening or abusive…
Anti-social behaviour - Rubbish, litter and waste…
Drug and alchohol issues
Criminal activity
Damage to the property
Tenant sub-letting the property
Issues with right to rent
None of the above
Landlords Experiences (N=2,200)
47 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
We then asked landlords if they had attempted to regain possession of their rental
property in the past 12 months. 69% of landlords responded that they had not, while 12%
of landlords said they had to attempt to remove tenants on 2 or more occasions. The full
findings can be found in figure 7.4 below.
Figure 7.4. Number of times landlords have attempted to remove a tenant from their
property in the past 12 months
We then explored the different routes landlords were taking to start the process of
reclaiming their property back from the tenant. In the past 12 months, 57% of landlords
reported starting this process by serving the Section 21 (no fault eviction), while 33%
reported they served a written notice in the first instance. The complete findings are
shown in the figure below.
Figure 7.5. How landlords initiated the removal process
69%
20%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 times 1 time 2 or more times
Attempts to remove tenants (N=2,180)
33%
57%
10%
0%
10%
20%
30%
40%
50%
60%
Provided the tenants with a
written warning
Section 21 Section 8
How did you start the process to regain possession of your property? (N=815)
48 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
A further question asked landlords for the primary reason for attempting to remove the
tenant from the property. The majority of landlords (60%) reported the primary reason
as rent arrears, followed by anti-social behaviour by the tenants (15%). The full findings
for each reason can be found in figure 7.7 below.
Figure 7.6. Reasons for attempting to remove a tenant in the past 12 months
Our research findings continue to show that rent arrears is a significant issue for the
private rented sector and is potentially high risk for landlords with finance attached to
their properties. If a landlord experiences rent arrears, then this could put their
investment at risk and ultimately could lead to the landlord losing the property, reducing
the supply of homes to rent. The findings above highlight that 36% of landlords have
experienced rent arrears in the past 12 months, and 60% of evictions were due to rent
arrears. On average, per property, landlords reported they were owed £1,584.93 in rent
arrears (N=1840).
2%
15%
4%
60%
6%
0.38%
3%
9%
0% 10% 20% 30% 40% 50% 60% 70%
I want to increase rents and the tenants refused to
pay a higher rate
Anti-social behaviour by the tenants
Illegal behaviour by the tenants
Rent arrears
Damage to the property
The tenants asked me to make repairs
I want to maked substantial renovations to the
property
I am selling the property
Primary reason for removing a tenant (N=773)
49 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 7.7. Landlord relationships with their tenants
The questions in the final part of this section examine the relationship between the
landlord and the tenant. Overall, a majority of landlords reported they felt they had a
good relationship with their tenants (84% of the sample), while 74% of landlords
reported that their tenants pay their rent on time. The full findings can be found in figure
7.8 above.
6%
1%
9%
44%
40%
6% 6%
13%
39%
35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Strongly disagree Disagree Neither agree nor
disagree
Agree Strongly agree
I have a good relationship with my tenants (N=2,132)
My tenants pay their rent on time (N=2,141)
8. Landlord Property
Portfolios
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51 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
8. Landlord Property Portfolios
In this penultimate section of the report, we examine and investigate the types of
households’ landlords typically let to, typical property locations, and whether the
property is typically furnished or unfurnished.
Our key findings are:
While portfolio size across landlords is widely spread from 1 property to more
than 21 properties, 26% of landlords reported having 2-3 properties, followed by
6-10 properties (19%) and 4-5 properties (17%)
The most popular property/household type for landlords is a 2-bedroom
property to 1 family (62% of landlords)
The South East is the most popular geographical region for landlords, with 22%
letting property in this region
The median average rent collected by landlords was £675
The average tenancy length was calculated as three years
Landlords were asked for the average rent they charge across their property portfolios.
The median average rent charged by landlords was £675 (M = £1,020.01, SD = 1445.15, N
= 1813).
The next question asked landlords for the average tenancy length across their portfolios,
from the analysis of their responses we can identify the average length as three years.
In the following figure, we explore the different portfolio sizes of landlords. The most
prevalent portfolio size was 2 to 3 properties (26%), followed by those with 6-10
properties at 19% of landlords. The findings are displayed in figure 8.1 below.
52 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
Figure 8.1. Landlord Property Portfolio Size
In the figure below, we investigate the types of properties landlords are currently letting
out. Overall, the most common property types were 2-bedroom one family properties
(62% of landlords) followed by 3-bedroom 1 family properties (50% of landlords).
Figure 8.2. Types of properties across a Landlords portfolio
The most common geographical regions to let out the property was the South East (22%
of landlords), followed by the North West (18%) and then by London (17%). The least
common regions were Northern Ireland and Scotland. However, this is likely due to
15%
26%
17%
19%
11% 11%
0%
5%
10%
15%
20%
25%
30%
1 property 2-3 properties 4-5 properties 6-10 properties 11-20 properties 21+ properties
Landlord Property Portfolio Size (N=1,962)
11%
36%
62%
13%
50%
12%
15%
10%
16%
0% 10% 20% 30% 40% 50% 60% 70%
Studio
1 Bedroom Property
2 Bedroom Property - 1 Family
2 Bedroom Property - Shared
3 Bedroom Property - 1 Family
3 Bedroom Property - Shared
4+ Bedroom Property Family - 1 Family
4+ Bedroom Property - Shared
HMO
What is the type of household you let to? (Please select all that apply) (N= 1,954)
53 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
sample bias as the membership of the RLA is mainly formed by landlords from across
England and Wales.
Figure 8.3. The geographical locations of the sample’s property portfolio (N=1,943)
The majority of landlords reported that their typical property was let as unfurnished
(72% of the sample). At the same time, 28% of landlords reported let their property as
fully furnished. There is a cross-over between the responses, to accommodate landlords
who offer a range of different furnishings across their portfolios.
Figure 8.4. The different furnishing options across landlords’ portfolios
6%
18%
12%
8%
8%
8%
17%
22%
14%
8%
1%
0.26%
0% 5% 10% 15% 20% 25%
North East
North West
Yorkshire and the Humber
East Midlands
West Midlands
East of England
London
South East
South West
Wales
Scotland
Northern Ireland
72%
22%
28%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Unfurnished Part furnished Furnished
How do you let your properties? (Select all that apply) (N=1,952)
9. Conclusions and
Recommendations
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55 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
9. Conclusions and Recommendations
This research report presents the findings of the first follow-on survey that focuses on
Welfare Reform as part of RLA PEARL’s longitudinal quarterly survey research project.
The research findings are based on the responses of 2,234 private landlords from across
the UK. The aim of the present study was to examine the impact of welfare reforms on
private residential landlords and the broader sector and builds upon our previous
research on universal credit and welfare reform (see: Simcock, 2017b). A further goal of
this report is to continue the monitoring of key trends in the private rented sector.
Universal Credit (UC) as part of the previous Coalition Government’s welfare reform has
changed the provision of social security benefits right across the UK, with all benefits
under UC amalgamated into one monthly payment. This has had a direct impact on the
housing sector with further additional changes, where Housing Benefit could have been
paid directly to the landlord by the Local Authority easily, under Universal Credit the rent
is paid directly to the tenant in the first instance (Hickman, Kemp, Reeve, & Wilson, 2017;
McKee, Muir, & Moore, 2017). Previous research has found that private landlords have
been less willing to let to tenants under-35 who are on benefits and specifically universal
credit due to fears over financial risk (Pattison & Reeve, 2017). Our own research
identified significant concerns regarding the impact of universal credit on landlords, with
38% of landlords reporting they had had a UC tenant in rent arrears in the previous 12
months (Simcock, 2017b). The findings of this research amplify the concerns
surrounding universal credit. In the present study, we found that 61% of landlords that
let to tenants on UC had experienced their UC tenants in rent arrears in the past 12
months. This has over doubled from 27% of landlords in 2016 and is a significant increase
from 38% of landlords in 2017. A further concern is the amount owed by UC tenants in
rent arrears; this has increased from £1,600.88 in 2017 to £2,390.19 in 2018. This is a 49%
increase on the previous year and is 254% higher than the current average monthly rent
across England; this further indicates that UC tenants are on average over three months
in arrears.
The significant increases in rent arrears for tenants that are on Universal Credit is a
serious concern. This poses a considerable financial risk for a landlord, and it is not
unsurprising that a majority of landlords are unwilling to let to tenants claiming benefits
through UC. It is reassuring that the Government have taken steps to introduce new
changes including;
the removal of explicit consent when applying for Alternative Payment
Arrangements when the tenant is in rent arrears of 2 or more months,
enabling the landlord to apply for direct payment from day 1 if their tenant has Tie r
1 or Tier 2 category vulnerabilities,
18-21-year old’s will be able to claim housing benefit through UC,
the removal of the 7-day eligibility waiting period, increasing advance payments,
and,
the introduction of the two-week Housing Benefit run-on.
Unfortunately, some of these changes have been introduced after data-collection, and
it is likely we would be able to examine the impact of these changes in the next quarterly
56 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
survey in this area in 2019. Nevertheless, given the substantial increase in the proportion
of landlords experiencing tenants that claim UC in rent arrears, further work to improve
the roll-out of Universal Credit would be welcome. Including, ensuring that rent arrears
follow the tenant when the tenant leaves the property, and to have the option for direct
payment to the landlord provided to the tenant at the offset.
The significant increase in rent arrears for both UC tenants and ‘legacy’ Housing Benefit
tenants also points to much wider issues than just the implementation of Universal
Credit. While some of those who have reported HB tenants being in rent arrears could
have had their tenant move over to UC without their knowledge, this is likely to be a
minority. This finding suggests that the freeze to LHA rates that has been in place since
2016 and the fact that LHA rates had not risen in-line with market rents between 2010
and 2016 could be driving the increase in rent arrears. Research published last year by
Shelter identified that freeze to LHA rates was putting significant pressures on lower-
income households and called for a lifting of the rates to the 30th percentile of the market
(Spurr, 2017). Not only is this freeze likely to be driving rent arrears and increasing the
risk of homelessness, but it is also causing landlords to be unwilling to let to tenants
claiming benefits. 55% of landlords reported that they were less likely to let to tenants
on benefits due to the 4-year freeze of housing benefit payments. Rent arrears are also
driving evictions; with 65% of landlords that have evicted a tenant on housing benefit due
to arrears. Based on these findings, it is clear that the freeze on LHA rates need to be
lifted for the private rented sector more urgently than planned. Not only does this have
broad support across the industry, it will help to lift tenants out of poverty and decrease
the risk of homelessness for families right across the UK.
As part of this quarterly survey, we asked landlords around their experiences of offering
longer-term tenancies. The findings of these questions provide timely foundations for
understanding some of the barriers for landlords to offer a longer-term tenancy. From all
the findings, it is clear that offering a 6-month initial tenancy agreement was either
because the tenant had requested it or because it was to protect the landlord from
significant financial risk. 36% of landlords reported that they do not typically offer a
longer tenancy due to previous bad experiences, and so offer a shorter tenancy for their
own security. This finding suggests that landlords lack confidence in their current ability
to regain possession of their property effectively if the relationship between the tenant
and landlord deteriorates (for example, through rent arrears or damage to the property
by the tenant). Other findings show that rent arrears, anti-social behaviour and damage
to the property are the significant causes of eviction. Therefore, reform to the current
section 8 process and a new housing court may act as an incentive to offering longer-
term tenancies. No good landlord wants to evict a paying tenant, and as evidenced in this
survey and previous surveys the main reason landlords do not increase rents is to keep
good tenants for the long-term. The current government consultation (MHCLG, 2018b)
and proposed three-year tenancy model is piece-meal policy-making, there is a
significant risk that introducing one element of change such as mandatory three-year
tenancies without court reform will cause havoc for the whole sector. Our previous
research has found that landlords would be significantly incentivised to offer a longer-
term tenancy if there were court reform and tax relief (Simcock, 2018b). Therefore, it
would make more sense to introduce this through tax relief in the Autumn budget and
look to bring forward court reform and improvement of the Section 8 eviction process.
This would enable landlords to offer a longer-term tenancy to those that desire it and
57 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
enable others who wish for flexible tenancy lengths to still obtain them. This would
ensure the PRS supports employment mobility, such as those moving for employment in
different areas.
Our analysis of the trends that are occurring in the private rented sector continues to
show the downturn in landlord attitudes and outlook. The proportion of landlords that
have added to their portfolio in the past 12 months has continued to decline, while the
proportion of landlords that have sold properties has continued to increase. With both
now standing at 14%, if this trend continues, we will soon see more landlords selling than
buying. This will have a negative impact on those renters who are unable to buy and rely
on the sector for a home. In regards to the forecast for property portfolios, more
landlords plan to sell over buying properties, further indicating a future under-supply of
privately rented homes. While 84% of landlords reported stable or increased tenant
demand for privately rented homes. However, there is good news for tenants, the
proportion of landlords that have kept the rent the same over the past 12 months has
increased by three percentage points, while those that plan to keep the rents the same
has remained flat on the past quarter at 58% of landlords. Nevertheless, of those that are
planning to increase the rents, the primary driver of this is the recent changes to
Mortgage Interest Relief (29%). These findings indicate that the tax changes are driving
some landlords to either exit the market or increase rents, which in the long-term will not
support the broader sector or tenants who rely on the private rented sector.
Key Recommendations
The findings of this research provide a greater understanding of the issues facing the
private rented sector and a deeper insight into the attitudes and behaviours of private
landlords. From these findings, we have developed some key recommendations that we
believe will improve the current private rented sector and work to secure a modern
private rented sector of the future that works for all. These are as follows:
1. Universal Credit needs to be paused from further roll-out to monitor the impact
of current changes and to develop the service further to ensure tenants and
landlords are not put in a dangerous financial situation with increasing rent
arrears.
2. Going forward the Alternative Payment Arrangement system needs to be
significantly improved. There are efforts underway to improve this already by the
DWP to move this to an online system. However, it is essential that this is working
well before migration is started from next year.
3. We would recommend that to mitigate risk of rent arrears for claimants, that
Work Coaches and Case Managers ask tenants during the application process if
they need or desire direct payment to landlords from the start of the claim as a
standard question. This could build on the housing confident scheme previously
delivered by DWP.
4. Part of the underlying ethos of Universal Credit is to promote financial
responsibility to claimants. However, a private landlord can only claim rent arrears
back as a 3rd party deduction against the current property where the tenant
resides. This does pose an issue, given the financial responsibility that the
Government expects of claimants, that when a tenant abandons the property
58 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
with rent arrears, that these rent arrears are not deducted from the award. This
does not provide the reassurance for landlords that they will be paid rent and
could be a potential factor influencing landlord unwillingness to let to tenants
claiming Universal Credit. Private landlords should not be expected to absorb
losses (especially at a time of increasing costs and taxation reform), and it would
not be expected that a different business such as a supermarket to absorb any
loses for non-payment for a product. To improve landlord confidence in the
system and to promote financial responsibility, Universal Credit should be
reformed to ensure that any rent arrears accrued can be claimed and taken from
the award, even if the tenant leaves the property where arrears have accrued.
This would provide the much-needed confidence that a landlord will receive rent
payments and not face significant loses when letting to tenants on Universal
Credit.
5. Ahead of managed migration there needs to be a significant communications
initiative with private residential landlords to inform, advise and educate on how
to navigate Universal Credit and how to escalate concerns and complaints when
there is risk of the tenancy breaking down.
6. The current positive partnership working between the DWP and the RLA should
continue to ensure known and emerging issues with the roll-out of Universal
Credit are identified, and concerns and experiences of private landlords are
understood by Government.
7. The increasing rent arrears for housing benefit and universal credit tenants
indicates broader issues in the private rented sector. We believe that the current
LHA freeze needs to be reviewed and lifted urgently, especially with the lifting of
the freeze for social landlords. Not only does this have broad support from
charities, trade bodies and other organisations across the industry, but it will help
to lift tenants out of poverty and decrease the risk of homelessness for families.
8. There are increasing regulative burdens being placed upon landlords in a
piecemeal fashion. There needs to be a large-scale review of the changes
introduced in the past two years to identify the impact on the development of the
sector. More and more landlords are now planning to sell properties, without
change there is going to be a contraction of the private rented sector. While it may
be the intention of the current government to encourage home ownership, fewer
properties to rent will not support those who cannot afford to buy or seek to rent
due to their circumstances.
10. References
PEARL
60 RLA PEARL | Investigating the effect of Welfare Reform on Private Renting
10. References
Hickman, P., Kemp, P. A., Reeve, K., & Wilson, I. (2017). The impact of the direct payment of
housing benefit: evidence from Great Britain. Housing Studies, 32(8), 1105-1126.
doi:10.1080/02673037.2017.1301401
McKee, K., Muir, J., & Moore, T. (2017). Housing policy in the UK: the importance of spatial nuance.
Housing Studies, 32(1), 60-72. doi:10.1080/02673037.2016.1181722
MHCLG. (2018a). English Housing Survey 2016 to 2017: private rented sector. London, UK:
Ministry of Housing, Communities & Local Government. Retrieved from
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attach
ment_data/file/723880/Private_rented_sector_report.pdf
MHCLG. (2018b). Overcoming the Barriers to Longer Tenancies in the Private Rented Sector.
London, UK.: Ministry of Housing, Communities & Local Government. Retrieved from
https://www.gov.uk/government/consultations/overcoming-the-barriers-to-longer-
tenancies-in-the-private-rented-sector
Pattison, B., & Reeve, K. (2017). Access to Homes for Under-35's: The impact of Welfare Reform on
Private Renting. Sheffield, UK: Sheffield Hallam University. Retrieved from
https://research.rla.org.uk/wp-content/uploads/SHU-Access-to-homes-for-
under35s.pdf
Simcock, T. J. (2016). Landlord Investment, Finance and Tax Report 2016. Manchester, UK:
Residential Landlords Association. Retrieved from https://research.rla.org.uk/wp-
content/uploads/Finance-and-Tax-Review-of-the-PRS-Report.pdf
Simcock, T. J. (2017a). State Intervention into Renting: Making sense of the impact of policy
changes. Manchester, UK: Residential Landlords Association. Retrieved from
https://research.rla.org.uk/wp-content/uploads/state-intervention-into-renting-
2017-report.pdf
Simcock, T. J. (2017b). Welfare Reform and Universal Credit: The impact on the private rented
sector. Manchester, UK: Residential Landlords Association. Retrieved from
https://research.rla.org.uk/wp-content/uploads/Welfare-Reform-and-Universal-
Credit-The-impact-on-the-private-rented-sector-2017.pdf
Simcock, T. J. (2018a). Examining Energy Efficiency & Electrical Safety in the Private Rented Sector.
Manchester, UK: Residential Landlords Association. Retrieved from
https://research.rla.org.uk/wp-content/uploads/examining-energy-efficiency-
electrical-safety-private-rented-sector.pdf
Simcock, T. J. (2018b). The Impact of Taxation Reform on Private Landlords. Manchester, UK:
Residential Landlords Association. Retrieved from https://research.rla.org.uk/wp-
content/uploads/impact-taxation-reform-landlords-2018.pdf
Spurr, H. (2017). Shut out: The barriers low-income households face in private renting. London, UK:
Shelter Retrieved from
http://england.shelter.org.uk/__data/assets/pdf_file/0004/1391701/2017_06_-
_Shut_out_the_barriers_low_income_households_face_in_pivate_renting.pdf
VOA. (2018). Private rental market summary statistics - April 2017 to March 2018. London, UK:
Valuation Office Agency. Retrieved from
https://www.gov.uk/government/statistics/private-rental-market-summary-
statistics-april-2017-to-march-2018
Whitehead, C., & Williams, P. (2018). Assessing the evidence on Rent Control from an International
Perspective. London, UK: London School of Economics. Retrieved from
https://research.rla.org.uk/wp-content/uploads/lse-international-evidence-on-rent-
control-report-2018-final.pdf
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... The DWP have introduced safeguards like Alternative Payment Arrangements (APAs) to give claimants who require additional support the option of receiving payment of housing costs to their landlord rather than to their own bank account, or to receive more frequent payments (in Scotland these are also available through UC 'Scottish Choices'). However, rent arrears associated with UC have still caused landlords to lose income (Hickman et al., 2018;Simcock, 2018), and the findings of this study suggest that this problem is greatest in the social rented sector. ...
Article
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Universal Credit (UC) has been rolling out since 2013 to radically alter the UK welfare system. Several UC design features, and its changes to benefit generosity, can lead to claimants struggling to afford rent payments. This article uses fixed-effects panel modelling to investigate UC’s housing insecurity impacts within English local authorities (2014 Q1 - 2019 Q1) by bringing together official UC data and Citizens Advice ‘advice trends’ data on rent arrears/homelessness issues within the social/private rented sectors. The results suggest UC rollout is associated with increases in rent arrears advice issues (though not homelessness advice issues). This impact tended to be greater when UC had been rolled out for longer (and therefore reached more claimants), and was greatest in the social rented sector where people are more vulnerable to arrears. This highlights a need to increase the level of UC payments and address its long wait periods and harsh sanctions.
Article
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The growth of the private rented sector (PRS) since the 2000s in countries with lightly regulated markets has led to significant questions over its ability to provide a homely environment for tenants. Much of the research in this area argues that legal frameworks, lack of regulation and financial motives of landlords are not conducive to the provision of homes which are secure, affordable, good quality and which offer tenants an opportunity to meet their health and wellbeing needs. this is despite legislative changes that seek to raise standards in the sector and promote greater professionalisation. this paper presents findings from an evidence review of research concerning home within the PRs across OecD countries. Rather than focusing on the experiences of tenants, it considers the impacts of landlord and letting agent behaviours on tenants' ability to make their rented house a home. We argue that landlords and letting agents can play a positive role in helping their tenants create a home, and that this offers benefits for both landlords and renters.
Article
Since 2009, homelessness has been on the rise, with growing evidence that welfare reforms are a key driver of this increase. However, does this mean that welfare reform has failed? In this paper, we use policy failure as a lens through which to critically examine welfare reform and homelessness in England. Drawing on McConnell’s definition of failure, which seeks to bridge the gap between objective definitions of policy failure (where failure is understood as the gap between policy objectives and actual outcomes) and subjective definitions (where failure is understood as actors’ perceptions), we examine welfare reform and homelessness to understand whether, how and by whom policy in this area might be considered to have failed.
Article
Housing allowances within the UK’s welfare system help protect low-income households from eviction. Universal Credit (UC) has faced criticism for threatening this with its long wait periods, increased conditionality and monthly direct payments. However, there is currently a lack of robust, national-level quantitative analysis on UC’s housing security impacts. This article addresses this, exploiting cross-area variation in the timing of UC rollout to assess its impact on landlord repossession rates within 323 English local authorities. A fixed-effects panel design was used, linking data from UC’s rollout schedule with Ministry of Justice data on legal repossession actions from 2012 Q1 - 2019 Q1. Results suggest that UC ‘Full Service’ rollout, on average, led to an increase of 1.74 landlord repossession claims, 1.42 landlord repossession orders and 0.70 landlord repossession warrants within local authorities (per 10,000 rented dwellings). This corresponds to a 4–5 percent increase on pre-rollout rates. UC’s impact tended to increase the longer it had been rolled out. Where ‘Full Service’ had been rolled out for 12+ months, it led to an increase of 2.60 landlord repossession claims, 2.89 landlord repossession orders and 1.09 landlord repossession warrants (per 10,000 rented dwellings), corresponding to a 6–10 percent increase on pre-rollout rates.
Technical Report
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The energy efficiency standards of the private rented sector have come under greater scrutiny over the past three years, with new regulations coming into force in April 2018. This means that no property can be let for a new tenancy if it is below an E EPC rating. This report builds upon our previous quarterly reports on the private rented sector and provides the opportunity for a deeper understanding of the issues facing private landlords, tenants and the wider sector. Key findings: Of those landlords with an F or G rated property, over 1-in-3 landlords reported that they could not afford to bring it up to at least an E rating. On average landlords reported that it would cost £5,789.76 to do so. On the basis of these findings, how tax relief is currently imposed on residential properties for improvements needs to be rethought. Tax relief for improvements should be applied against rental income, rather than at the sale of the property. The rapidly changing sector, economic uncertainty, and increasing regulation is taking its toll. The proportion of landlords that are planning to sell properties in the next 12 months has increased by four percentage points since Q3 2016 and now stands at 23%. We estimate that this could be 133,000 net loss of properties to rent over the next 12 months. A final concern is that a large proportion of the F and G rated properties were reported to be built before 1919. Whilst this is not an argument that because a home is old that it does not provide a safe, secure and affordable home, however, the question is, do the homes of the past offer what is needed for the homes of the future?
Technical Report
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Housing is quickly rising up the political agenda, with more focus being directed to policy changes in the private rented sector. At the moment there are currently 15 consultations by the Government on issues affecting the sector. Notwithstanding this, numerous changes have already been announced that will see the Government take direct actions to influence the operation of a market. These changes include the proposed deposit cap, the ban on letting agent fees, and the already introduced ‘Right to Rent’ checks, that essentially turn Landlords into defacto border control officers. This report provides an opportunity to make sense of recent and proposed policy changes and how these changes are and will change the nature of renting. This report presents the findings from our longitudinal research project and survey data collected from 2,792 responses.
Research
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Over the past 2 years there has been significant political attention provided to the private rented sector. The sector is now incredibly important to providing homes for millions of households across the UK. Nevertheless, significant policy and regulative changes have occurred, including taxation reform, energy efficiency measures, increasing regulations, and welfare reform. The recent Housing White Paper has also proposed further changes such as encouraging the 3-year tenancy agreement. The research presented in this report is part of a longitudinal project to examine trends across the sector in relation to policy changes. This report focuses on the impact of welfare policy changes and collected data from a large sample of 2,974 landlords.
Article
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In recent years, a number of welfare reforms have been introduced in the UK by Conservative-led governments. The most high profile of these is Universal Credit (UC), which is currently being rolled out across the country. A key feature of UC is a change in the way the income-related housing allowance for social housing tenants (Housing Benefit) is administered, as under UC, it is paid directly to tenants (direct payment), who are responsible for paying their rent. This represents a step change for them as for more than 30 years landlord payment has been the norm in the UK. There has been little research into direct payment. This paper seeks to address this gap in knowledge by presenting the key findings of an initiative designed to trial direct payment. It finds that many tenants experienced difficulties on direct payment. Reflecting this, landlords' arrears rose markedly.
Article
The UK has been engaged in an ongoing process of constitutional reform since the late 1990s, when devolved administrations were established in Northern Ireland, Scotland and Wales. As devolution has evolved there has been a greater trend towards divergence in housing policy, which calls into question any notion of a ‘UK experience’. Whilst the 2014 Scottish independence referendum again returned constitutional reform high onto the political agenda, there still remain tensions between devolved governments and the UK Government in Westminster, with England increasingly becoming the outlier in policy terms. Informed by ideas of social constructionism, which emphasises the politics of housing, this paper draws on an analysis of policy narratives to highlight the need for greater geographical sensitivity. This requires not only more spatial nuance, but also a recognition that these differences are underpinned by divergent political narratives in different parts of the UK. This emphasis on the politics underpinning policy has relevance internationally in other geographical contexts.
Overcoming the Barriers to Longer Tenancies in the Private Rented Sector
  • Mhclg
MHCLG. (2018a). English Housing Survey 2016 to 2017: private rented sector. London, UK: Ministry of Housing, Communities & Local Government. Retrieved from https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attach ment_data/file/723880/Private_rented_sector_report.pdf MHCLG. (2018b). Overcoming the Barriers to Longer Tenancies in the Private Rented Sector. London, UK.: Ministry of Housing, Communities & Local Government. Retrieved from https://www.gov.uk/government/consultations/overcoming-the-barriers-to-longertenancies-in-the-private-rented-sector
Access to Homes for Under-35's: The impact of Welfare Reform on Private Renting
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Pattison, B., & Reeve, K. (2017). Access to Homes for Under-35's: The impact of Welfare Reform on Private Renting. Sheffield, UK: Sheffield Hallam University. Retrieved from https://research.rla.org.uk/wp-content/uploads/SHU-Access-to-homes-for-under35s.pdf
UK: Residential Landlords Association
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Simcock, T. J. (2016). Landlord Investment, Finance and Tax Report 2016. Manchester, UK: Residential Landlords Association. Retrieved from https://research.rla.org.uk/wpcontent/uploads/Finance-and-Tax-Review-of-the-PRS-Report.pdf
The Impact of Taxation Reform on Private Landlords. Manchester, UK: Residential Landlords Association
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Simcock, T. J. (2018b). The Impact of Taxation Reform on Private Landlords. Manchester, UK: Residential Landlords Association. Retrieved from https://research.rla.org.uk/wpcontent/uploads/impact-taxation-reform-landlords-2018.pdf
Shut out: The barriers low-income households face in private renting
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Spurr, H. (2017). Shut out: The barriers low-income households face in private renting. London, UK: Shelter Retrieved from http://england.shelter.org.uk/__data/assets/pdf_file/0004/1391701/2017_06_-_Shut_out_the_barriers_low_income_households_face_in_pivate_renting.pdf VOA. (2018). Private rental market summary statistics -April 2017 to March 2018. London, UK: Valuation Office Agency. Retrieved from https://www.gov.uk/government/statistics/private-rental-market-summarystatistics-april-2017-to-march-2018