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Most renters happy but have concerns about long-term viability

  • 14/03/2022
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Most renters happy but have concerns about long-term viability
The majority of renters are happy with their current property and satisfied with their landlord but most do not view renting as a long-term option.


According to a report by the Social Market Foundation commissioned by Paragon, which surveyed 1,376 adults in private rented accommodation, around 81 per cent of those surveyed are happy with their current property and 85 per cent said they were satisfied with their landlord.

Satisfaction with private renting was highest amongst those aged 55 and over at 74 per cent, which compared to 58 per cent of those aged between 35 and 64.

The main thing renters valued was not having to pay for repairs, maintenance and insurance with two thirds citing this factor. Respondents also said renting allowed them to afford to live in more expensive locations and gave them more flexibility.

The report continued that the biggest dissatisfaction was with “being a renter”, with around third, or 34 per cent, saying they were not satisfied with their renter status.

However, over half of private renters, 56 per cent, said they were concerned they could be financially worse off in the long run. This rose to 63 per cent of those aged 18 to 34.

Other disadvantages included a lack of control over property, whether that was décor, the ability to improve energy efficiency or keep a pet.

Overall, most renters are content where they are now but do not view renting as a long-term option, with half expecting to leave the private rented sector in the next 15 years. This rises to two thirds for 18 to 34-year-olds.

The report also found that 68 per cent of those who expect to remain the private rented sector would like buy a property but do not think they would be able to.

Paragon Bank’s managing director of mortgages Richard Rowntree said “outdated and tired cliches” around private renting should be challenged and welcomed the findings of the report.

He said: “In our experience, the vast majority of landlords seek to provide a good quality home and enjoy a healthy relationship with their tenants; the significant investment in private rented property by landlords has helped drive up standards over the past 15 years and today homes in the sector are generally newer, larger and more energy efficient than ever before.”

He said the private rented sector was always seeking ways to improve the renting experience and welcomed the report’s recommendations.

“People from all walks of life now call the private rented sector home and we must strive to create a sector that meets everybody’s needs,” Rowntree said.


Future projections

The report found that if home ownership rates continued to rise at recent current levels, the proportion of renters would fall to 16 per cent, versus 19 per cent now.

However, if the market reverted to “longer-running trends” where the private rented sector continued to grow and outpace home ownership, the private rented sector could reach 30 per cent.

It said 25 to 34-year-olds were most sensitive to changes in the rate of home ownership and, depending on the scenario, between a fifth and two thirds could end up renting privately.

The report added that by 2035, around half of households in the private rented sector could headed by someone aged over 45, which is up from around a third currently.


Policy recommendations

The report said policymakers should support private renters by helping them accumulate wealth, such as deposit building ISAs or rentership models where tenants get a stake in the building.

It added that tenancy agreements should have a minimum contract length, with 69 per cent favouring setting this at 24 months.

Renters should have more control over their homes, making it simpler to make “reasonable alterations” or keep pets, the report said.

From a landlord perspective, the report said landlords should be made more accountable and standards of private rented sector should be improved via tax incentives.

Policymakers should also help those wanting to leave the private rented sector by growing the supply of social housing and continuing support for first-time buyers.

Aveek Bhattacharya, report co-author and SMF Economist, said “dominant cultural narratives” around the private rented sector painted a “misleading picture” as most renters were in good living conditions and had a good relationship with their landlord.

He added: “It is absolutely right that the government should seek to help the minority with poor standard accommodation and unprofessional landlords.

“At the same time, it needs to think harder about what it can offer the typical renter – who is largely happy with their circumstances today, but has doubts about whether they want to keep renting long-term.”

He added that giving renters more control over their homes would be beneficial and would incentivise landlords to make properties “good, and not just decent”.

However, he said the biggest challenge would be developing policies that could persuade renters they are not missing out on financial security or stability if they do not own a home.

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