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LATEST MEMBER DEMOGRAPHICS: The BIG RMA Landlord & Letting Agent Census – Apr 2023

Cencus conducted with RMA & RM.org registered members between Oct 2022- Apr 2023 on RentalMarket.org

Introduction

The BIG RMA Landlord & Letting Agent Census is a bi-annual survey of landlords and letting agents who are registered members of The Rental Market Association (RentalMarket.org) and whom own and/or manage privately rented properties in England. The purpose of the survey is to provide understanding of the characteristics and experiences of landlords and how they acquire, let, manage and maintain privately rented accommodation, as well as providing key demograpahical data relating to our landlord members.

The first chapter covers the characteristics of landlords, why and how they became a landlord and how they view their current role. We also include an overview of private rented dwellings and the households living in them, including the types and location of rented homes and the types of tenants. It also explores how landlords and agents set rents and the circumstances around how tenancies end. Our Census examines landlord and agent attitudes, including the willingness of landlords and agents to let to different types of tenants and views on longer tenancies. It also presents findings on landlord and agent compliance with current legal requirements.

Spending Trends

Other chapters provide evidence regarding the likely future of the private rented sector by setting out findings about landlords’ stated future plans, attitudes towards landlord insurance, boiler care issues and other landlord trends and habits – both past, present and in the future. Briefly, the Census is an online survey of almost 38,000 members of RM.org. All statistics were gathered between October 13th 2022 – April 13th 2023 and reflect results for this period.

Main Findings & Key Demographics

  1. These results correspond to an estimated 3 million landlords/agents operating in the private, residential property rental sector.
  2. Most landlords operate as private individuals rather than as part of a company or organisation.
  3. 94% of landlords rent property as an individual, 4% as part of a company and 2% as part of some other organisation (omitting bankruptcy’s and repossessions).
  4. While almost half of landlords own just one property, half of private rented sector tenancies are let by the 18% of landlords/agents with five or more properties.
  5. 45% of landlords have just one rental property. (This represents 22% of the private rented sector.)
  6. A further 37% own between two and four properties (representing 31% of the sector). The remaining 18% of landlords/agents own five or more properties, representing 48% of the private rented sector – by property volume.
  7. Ignoring the methodological differences, since 2010, the proportion of landlords with just one property has reduced from 78% to 45% or from 40% to 21% of the sector. Meanwhile, the proportion of landlords with five or more properties increased from 5% to 20% (or from 39% to 48% of the sector respectively in property weight)
  8. Landlords are, on average, older and less ethnically diverse than the general population. Most have been landlords for some time.
  9. Over half (59%) of landlords are aged 55 years or older. Not surprisingly, given the older age profile, a third (33%) of landlords are retired.
  10. 69% of landlords have let property for 6 years or more. The average (mean) length of time that landlords had let property was 16.5 years.
  11. Landlords most commonly reported that they had become landlords because property was preferable to other investments and/or to contribute to their pension.
  12. 46% of landlords became a landlord because they preferred property to other investments; 44% did so to contribute to their pension. 10% became a landlord to let property as a full-time business, although 53% of landlords bought their first rental property with the intention of renting it out, 32% did so to live in themselves.
  13. Landlords who had been letting for longer were more likely to have used a mortgage to fund their first rental property and more likely to currently use a Buy to Let mortgage compared to more recent landlords (past 10 years)
  14. Landlords, on average, report a gross rental income of £16,700 per year (before tax and other deductions). For most landlords income from rent makes up 49% of their total gross income.
  15. Three in five (61%) landlords had gross rental income of less than £20,000, while a further quarter (26%) reported between £20,000 and £59,999.
  16. A rather impressive 13% reported a gross rental income of £60,000 or more.
  17. Using their annual reported gross income (before tax and other deductions and excluding rental income) and their gross rental income, it was calculated that landlords received 42% of their total gross income from rental property.
  18. Over the next two years, half of landlords plan to keep the number of rental properties the same, with similar proportions planning to increase the number of properties as those planning to decrease or leave the rental business.
  19. Letting practices vary between landlords and agents. For example, agents are more likely than landlords to increase rent for a new tenant and for a tenancy renewal. They are also more likely to require a larger deposit.
  20. 54% (up 4% on previous year) of agents increased the rent for their last letting to a new tenant compared to 45% of landlords (up 3% on previous year). For their most recent tenancy renewal 76% (up 6% on previous year) of landlords kept the rent the same compared to 65% of agents.
  21. For their last letting, 61% of agents took a deposit of more than four and up to six weeks’ rent (45% of landlords took a deposit of this size). Almost half (47%) of landlords took a deposit of up four weeks’ rent (compared with 29% of agents).
  22. Meanwhile, landlords are less willing than agents to let to certain groups, including those in receipt of Housing Benefit and Universal Credit, non-UK passport holders and families.
  23. 52% of landlords and 37% of agents reported that they would be unwilling to let to tenants in receipt of Housing Benefit. Similar proportions reported that they would be unwilling to let to anyone on Universal Credit (47% and 33% respectively).
  24. The most commonly reported reasons for not letting to this group included the risk of delay in payment or unpaid rent and the risk that benefits would not cover the rent.
  25. A third (31%) of landlords and 12% of agents are unwilling to let to non-UK passport holders. Reasons for this were not explored.
  26. 22% of landlords and 10% of agents are unwilling to let to ‘families’.
  27. Most often this was because their property or properties were unsuitable for families and also because of the greater risk of damage/disrepair to the property.

Landlords were asked how many rental properties they own in England.

  1. 45% owned one rental property, representing 21% of rental market stock.
  2. A further 37% owned between two and four rental properties, representing 31% of tenancies.
  3. The remaining 18% of landlords owned five or more properties, representing almost half (41%) of tenancies
  4. The portfolios of individual landlords were considerably smaller than those of companies and organisations.
  5. Landlords who had been letting for longer tended to have larger portfolios. Of landlords with 11 or more years’ experience, 70% had two or more properties, compared with 48% of those who had been letting for four to 10 years and 22% of those who had been a landlord for three years or less
  6. There has been a significant decrease in the proportion of landlords with just one property, from 78% to 45%. This decrease may in part be a function of the different methodology, e.g. such landlords may have longstanding tenants or simply a moving up in bands due the the purchase of additional property.

Rental Market EPC Ratings (by stock)

  1. 37% of Landlords and Letting Agents current property stock is currently non-compliant/ready (Rating C or above) for 2025/28 regulations (now 2028 only, updated 05th May 2023)
  2. 26% of stock is rated C – the ‘cusp’ for compliant 2025/28 EPC Regulations
  3. 63% of stock is currently compliant with the 2025/28 regulations for rental property energy performance ratings
  4. It is estimated that almost 3 million properties will require upgrades in order to continue renting their properties under the new minimum EPC requirement (Banded A-C)

Ending a Tenancy and Tenant Eviction

  1. Landlords and agents who reported a tenancy ending within the last two years were asked why this tenancy (or these tenancies) had ended. The findings are reported for both landlords and agents together because agents are likely to be responding on behalf of a number of landlords that they represent and it is not appropriate to compare the responses of the two groups.
  2. The most common reason, selected by half (50%) of landlords and agents, was that it was the end of the tenancy and the tenant decided not to renew. A quarter (25%) of landlords and agents reported that tenancies ended because the tenant moved out before the end of the tenancy
  3. Other reasons for tenancies ending included the landlord or agent asking the tenant to vacate amicably (3%), the landlord or agent evicting the tenant (15%)

Eviction Numbers Increasing

Where landlords and agents reported that they had chosen to end a tenancy in the last two years either by asking the tenant to leave, not renewing a tenancy or evicting a tenant, they were asked to select the reasons for this:

  1. The most common reason for landlords and agents to end tenancies, selected by almost half (44%) of landlords and agents, was that the tenant was in arrears.
  2. Less than a quarter 25% (down 20% on previous year) of landlords and agents chose to end a tenancy because the property was not cared for.
  3. Other reasons for ending the tenancy included to refurbish the property and re-let it (20%), to sell the property and that the tenant had too many complaints about the property (13%)

Landlords and agents were asked what would encourage them to offer longer tenancies.

  1. They most commonly reported that they would if it was easier to remove problem tenants (72% up 2% on previous year).
  2. In most cases, landlords and agents report that it was the tenant’s choice to end a tenancy.
  3. 50% of landlords and agents reported that, in the last two years, they had ended at least one tenancy because the tenancy ended and the tenant did not want to renew – that’s 1 tenancy turnover for every landlord every 4 years
  4. A quarter (22% – down 3% on previous year) ended because the tenant had moved out before the tenancy had ended.
  5. Meanwhile, 7% of landlords and agents asked the tenant to leave, 7% evicted the tenant and 4% decided not to renew.
  6. The most common reasons for evicting, asking a tenant to leave or not renewing a tenancy were due to rent arrears (58%) or due to the tenant not caring for the property (35%).
  7. In relation to the last tenancy that ended, 58% of landlords and 51% (-3% on previous year) of agents returned the full deposit to the tenant. A quarter (24%) of landlords and 30% of agents returned some of the deposit.
  8. Landlords and agents did not return the deposit (either in part or at all) due to damage to the property or contents (65% of landlords and 60% of agents) and to clean the property for the next tenant (65% of landlords and 65% of agents).

Age, ethnicity and time spent as a landlord

  1. Individual landlords were asked questions about their personal characteristics and landlord journey
  2. Landlords were, on average (median), 57 years old. This is older than the general population. At the time of the Census, the median age for the population of England and Wales was 40 years.
  3. Over half (59%) of landlords were aged 55 or older, representing 62% of property stock
  4. In 2010, 70% of landlords had been landlords for 10 years or less, representing 48% of stock.

Financing & Buy to Let Mortgages

  1. Compared with longer standing landlords, recent landlords were more likely to have bought their first rental property to live in themselves and less likely to have bought it with the intention of letting it.
  2. Over a third (37%) of landlords that had been a landlord for three years or less bought their first property to live in themselves, compared with 28% of those who had been a landlord for 11 or more years.
  3. On the other hand, half (49%) of those who had been a landlord for three years or less bought their first rental property with the intention of letting it out, compared to two thirds (58%) of those who had been a landlord for 11 or more years
  4. Landlords who had bought or built their first rental property were asked about the sources of funding for this purchase or build. Almost three quarters (72%) reported using a mortgage, 37% used personal savings and 8% used an inheritance
  5. Recent landlords were less likely to have used a mortgage to fund their first rental property, compared to longer standing landlords. Almost two thirds (63%) of those who had been a landlord for three years or less had used a mortgage. In comparison, around three quarters of those who had been a landlord for longer had used a mortgage (73% of those who had been a landlord between four and 10 years, and 75% of those a landlord for 11 or more years),

Landlord Vocation Status

  1. 39% of landlords were employed full-time and 11% part-time. A third (33%) of landlords were retired. Less than a fifth (17%) of landlords were self employed
  2. Over half of tenancies were represented either by landlords who were retired (28%) or those self-employed as a landlord (30%)

Property values and borrowing

  1. Landlords were asked the approximate value of their total rental property portfolio. The average (median) total market value of landlord rental portfolios was £400,000. Nearly a quarter (23%) of landlords had portfolios they valued at less than £200,000. A further 36% had portfolios they valued from £200,000 to £499,999. Nearly a quarter (22%) had a portfolio they valued from £500,000 to £999,999, with the remaining 18% having rental property portfolios valued at £1 million or more
  2. The longer the time spent letting, the more likely landlords were to have a higher value portfolio. Of those who had been a landlord for three years or less, only 15% had a portfolio valued at more than £500,000. (This rose to 32% of those who had been letting for between four and 10 years and to over half (54%) of those letting for more than 10 years)
  3. The average (mean) estimated value per rental property for all landlords was £261,900 with the average house value £243,000
  4. Landlords who reported using borrowing or loans to fund their rental property were also asked the approximate value of such borrowing. The average (median) value of loans or borrowing was £180,000. One in three (29%) landlords using borrowing had loans of less than £100,000, with a further 38% having loans of between £100,000 and £300,000. The remaining third (33%) had loans of £300,000 or more
  5. The longer a landlord had been letting the higher the value of their loans or borrowing. Only 3% of landlords who had been letting for three years or less had borrowing of £500,000 or more. This rose to 12% for those who had been letting for between four to 10 years and to 27% for those who had been letting for more than 10 years
  6. The median equity or net value of landlord rental portfolios was £220,000, calculated from the median value of landlord rental portfolios minus median value of loans or borrowing.
  7. For those who had existing loans or borrowing, the loan to value ratio of the borrowing was calculated using the landlord’s estimate of their portfolio’s market value. The median loan to value ratio for these landlords was 50%.
  8. Over a third (34%) of landlords with debt or borrowing on their rental properties had a loan to value ratio of 39% or less, with another third (32%) one of 40 to 59%. A quarter (25%) had a loan to value ratio of between 60 to 79%, with a further 9% having a loan to value ratio of 80% or more. Of these landlords, 4% had an estimated loan to value ratio of 100% or more,

Portfolio loan to value ratios for landlords with debt

  1. Landlords were asked which, if any, types of loans or borrowing they currently have to fund their rental property. Over half (55%) of landlords had a Buy to Let mortgage, representing 61% of tenancies. More than a third (39%) of landlords had no debt or borrowing, representing 30% of tenancies. Smaller proportions had a commercial loan (4%) or a loan from family or friends (3%),

Extent and type of borrowing for funding of rental property

  1. Landlords who had been letting for longer were more likely to have a Buy to Let mortgage. Of landlords who had been a landlord for three or less years, almost half (49%) had a Buy to Let mortgage. This increased to 58% of those who had been letting for between four and 10 years, and 54% for those letting for 11 or more years
  2. Of recent landlords (three years or less), 43% had no loans or borrowing to fund their rental property, compared to 34% for those who had been a landlord for between four and 10 years and 42% for those landlords who had been letting for more than 10 years

Type of rental property currently let or managed by landlords and agents

  1. Landlords with larger portfolios are more likely to be letting a wider range of property types. As such, the proportion of landlords with each property type increased with portfolio size
  2. For instance, the most common type of property for landlords with portfolios of all sizes were terraced houses. A third (32%) of landlords with one property had a terraced house, while half (48%) of those with between two and four properties had at least one, as did 70% of those with five or more properties in their portfolio. However, the distribution of types of properties was similar for landlords with different sized portfolios

Gas and Boiler Issues in let property

  1. Landlords reported a rise (10%) from previous year in boiler repairs with 12% of property requiring a repair on a gas boiler within their let properties.

Types of Gas Boiler by replacement type

  • Types of gas boilers by replacement type
    • Combi – 44%
    • Regular – 40%
    • System – 16%

By regional breakdown

  1. The most boiler repairs were needed in London with 26.08% of broken boilers estimated to have broken down during this period.
  2. This was closely followed by the South East 21.28 (omitting London) West Midlands at 12.04% and the North East at 10.59%.
  3. Boilers are least likely to break down in Yorkshire with 7.27%, Scotland at 6.38% and the North West at 4.79%.
  4. These results, at an average of 5.1% nationally, suggests 30,000+ boiler repairs were undertaken on property within portfolios managed by landlords, letting agents & property managers under the guidance of RM.org.

Landlord Insurance

93% of landlords reported having landlord insurance cover for their properties, by type popularity

  1. Buildings Insurance
  2. Contents Insurance
  3. Boiler Care Cover/Home Emergency Cover
  4. Public Liability Insurance
  5. Rent Guarantee Insurance
  6. Unoccupied Property

Landlords with a single property were less likely to have an insurance policy than those with a portfolio of two properties or more. Those with a single property (second home/accidental landlord) stood to lose the most in annual rental yield (voids, repairs, legal fees etc). This is owing to the lack of protection and the high likelihood of incidents which would otherwise be covered by a basic insurance cover.

Boiler Cover Insurance

  1. 75% of landlords indicated that they have boiler care/home emergency cover to protect their rented property boilers for repair and replacement and for electrical and plumbing incidents during a tenancy.
  2. Of those without boiler care cover, 14% suggested they were either thinking of getting cover or were actively seeking to get cover.
  3. Of the reasons given for not having boiler cover (1) Not enough time (2) too expensive (3) not important (4) Did not renew previous policy (5) portfolio cover options minimal (6) No gas in property (18%).

©RM.org copyright 2023.

This Census may be republished in part or full without permission. If you require any further information regarding the collation of this survey or indeed any of the information and statistics included please email enquiries@rentalmarket.org.

This document/publication is also available on our website at RentalMarket.org. All rights reserved RM.org & The RMA.