Case study

Understanding landlords in an age of soaring rents

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Author: Chris Lord, NatCen Social Research, in collaboration with Matt Barnes, NatCen Social Research and James Lloyd, Strategic Society Centre

Date: 25 March 2014

Type of case study: Research

About the research

In 2013, the UK Communities and Local Government Committee of Parliament advocated for more protection for private rental tenants, citing concerns regarding the growing numbers of tenants with children, unsafe living conditions, increasing rents, and exorbitant letting fees.

The social science studies of landlords in the private rented sector have to date been limited in scope and detail. This report presents research on private landlords in Britain with an aim to inform the political debate on these issues with key descriptive evidence regarding:

  • the landlord population in the UK and how it has grown
  • the socio-economic characteristics of buy-to-let landlords, specifically their capabilities, economic security, financial position and financial planning

The researchers found that landlords in the private rented sector have risen over the last decade, currently at around two per cent of the adult population.

Compared to tenants who rent from private landlords and other social groups, the majority of these landlords have a more privileged background -- that is, they tend to be white older males who are married, well educated, employed, and with no children at home.

The mean financial wealth of private-sector landlords is £75,103 compared to £9,506 for their tenants. Additionally, these landlords save more money at far greater rates than the general population, believing that such investments are necessary for their retirement pensions and further real estate ventures. Sixty-two per cent of private landlords report that they’re able to withstand the economic risk of a quarter drop in income for a year or more.

The report presents evidence to inform the policy debate on landlord and tenant rights. The accompanying policy document ‘Whose Home? Understanding landlords and their effect on public policy’ suggests that policy changes that favour tenants over landlords may have little impact on landlords.

About the data

This study involved a cross-sectional analysis of two large-scale nationally representative datasets to profile the social, economic, financial, and other circumstances of private landlords, as well as the general population:

The Wealth and Assets Survey is a longitudinal UK survey which addresses gaps in data regarding the economic well-being of households by gathering information on assets, savings, debt, wealth distribution, financial planning and attitudes toward financial matters.

The researchers obtained a Special Licence to access the anonymised but more detailed information in the survey; a less detailed version is also available under a standard End User Licence. In Wave 2 of the Wealth and Assets Survey (2008 to 2010), 46,000 people aged 16 and older were interviewed.

The main objective of the British Household Panel Survey is the further understanding of social and economic changes at the individual and household level in Britain. More than 10,000 individuals aged 16 and older, in more than 5,000 households, were surveyed regarding their consumer behaviour; employment and labour; income property and investments; social attitudes and behaviour; as well as quality of life.

Methodology

Analysis methods included descriptive analysis and binary logistic regression, taking into account the complex sampling design and weighting procedures used in the surveys. Unless explicitly stated otherwise, the differences are statistically significant.

Publications and outputs

Lord, C., Lloyd, J. and Barnes, M. (2013) Understanding landlords, research paper, Strategic Society Centre. Retrieved 24 March 2014 from http://www.strategicsociety.org.uk/wp-content/uploads/2013/07/Lord-C-Lloyd-J-and-Barnes-M-2013-Understanding-Landlords.pdf

Lloyd, J. (2013) Whose Home? Understanding landlords and their effect on public policy, research paper, Strategic Society Centre. Retrieved 24 March 2014 from http://www.strategicsociety.org.uk/wp-content/uploads/2013/07/Lloyd-J-2013-Whose-Home-Understanding-landlords-and-their-effect-on-public-policy.pdf

In addition, this research received the following media coverage:

Dale, S. (4 July 2013) 'Thinktank calls for BTL lending cap to boost home ownership', Money Marketing. Retrieved 24 March 2014 from http://www.moneymarketing.co.uk/mortgages/thinktank-calls-for-btl-lending-cap-to-boost-home-ownership/1073801.article

The Economist (20 July 2013) 'The changing property market: Rented castles', The Economist. Retrieved 24 March 2014 from http://www.economist.com/news/britain/21582009-market-finally-adapting-surge-private-renting-rented-castles

Lloyd, T. (4 July 2013) 'First-time buyers held back by landlords', Inside Housing. Retrieved 24 March 2014 from http://www.insidehousing.co.uk/ihstory.aspx?storycode=6527651

Osborne, H. (4 July 2013) 'Ban landlords from buying new-build properties, says thinktank', The Guardian. Retrieved 24 March 2014 from http://www.theguardian.com/money/2013/jul/04/ban-landlords-new-build-properties

Trowbridge, P. (4 July 2013) 'Landlord growth "blocking first-time buyers"', Sky News. Retrieved 24 March 2014 from http://news.sky.com/story/1111558/landlord-growth-blocking-first-time-buyers

Whateley, L. (3 July 2013) 'Rich landlords block first-time buyers', The Times. Retrieved 24 March 2014 from http://www.thetimes.co.uk/tto/money/article3807219.ece?CMP=OTH-gnws-standard-2013_07_04


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