Member survey results: Rents and tenure

26
Aug

We recently asked landlord members to complete a survey.
The survey asked for members’ approaches to rent increases and their views on how proposals to increase tenants’ security of tenure and controls on rent increases would affect them. A similar survey was sent to CLA members to gather agents’ views.

The landlord survey showed that 78% of landlords do not increase rent mid tenancy. Amongst those who do, 70% last did so more than 12 months ago and 80% last increased the rent by 2-5%. 36% said they would be more likely to increase rents if the government introduced controls on how often increases could be carried out.

If the government removed landlords’ ability to end tenancies naturally at the end of the fixed term just 13% said they would continue at present. 53% said they would be more selective in the tenants they let to, 32% would charge higher deposits, 54% would be less likely to invest in more rental properties and 29% said they would leave the sector entirely.

Amongst CLA members only a third review rents periodically mid tenancy. 39% don’t generally review rents mid tenancy and 28% do so only when the landlord requests it. When increasing rents 76% do so in line with market rates with the remainder doing so in line with a specified rate in the lease such as inflation or by an amount determined by the landlord. 47% said they would be more likely to increase rents if the government introduced controls on how often increases could be carried out.

If the government removed landlords’ ability to end tenancies naturally at the end of the fixed term 58% said they would be more selective in the tenants they let to, 28% would charge higher deposits and 19% said they would leave the sector entirely.

Amongst the comments received from members were: -

“It is very difficult to evict tenants who have breached the terms of the tenancy and the idea of being tied into a contract with such tenants…is worrying. It is hard to prove a genuine breach of the tenancy to bring the lease to an end during the fixed term.”

“If rent increases are limited and not related to market a landlord would be foolish not to raise the rent whenever possible.”

On the subject of tenancy length, the Scottish Government last week published their annual Scottish Household Survey which for the first time includes data on average tenancy length in the private rented sector. The survey shows that the average tenancy length currently stands at 3 years. This is a strong indication that although most leases are for an initial term of 6 months, landlords rarely exercise their right to end the lease at that point. The full survey can be found here.

The above themes are topical amongst politicians and the Scottish Government is planning to go to consultation soon on proposals to change the current tenancy regime. The exact details have yet to be published; we will let members know as soon as further information is released.