Qualitative research to explore the implications for private rented sector tenants and landlords of longer term and moresecure tenancy

2 PROFILE OF PARTICIPANTS & OPINION DRIVERS

2.1 This chapter provides an overview of the key characteristics of the tenants and landlords who took part in the research. This is followed by an examination of some of the other factors that appeared to have the potential to influence landlords or tenants views on the tenancy regime.

Profile of research participants

2.2 All research participants were offered confidentiality and the information set out below reflects that commitment, i.e. we describe the key characteristics of the overall sample rather than providing specific details on the profile of individual participants.

Tenant participants

2.3 A total of 63 tenants took part in the research, with the overall group relatively evenly divided between those living in urban, smaller town or rural locations. The areas in which those participating lived included Aberdeen, Alloa, Dunblane, Dundee, Edinburgh, Glasgow, Glenrothes, Inverness, Kirkcaldy, Peebles, St Andrews, Scottish Borders villages, South Queensferry, Stirling and Stirlingshire villages.

2.4 Other points to note about the tenant households which took part are that:

• They included a number of higher income working households. For the purposes of this study, having a higher income was self-defined and was taken to be having sufficient household income to allow someone to make active housing choices in the area in which they wished to live.
• A number of lower income working-age households also took part. Some of these households were in receipt of LHA (full or partial), with a small number also containing someone in lower paid and/or part-time employment. All but a small number were working age households and they also included a small number of households led by a student.
• Many households contained children, with these being evenly divided by single and two parent households. These households included those in the higher and lower income brackets, a number of households in receipt of LHA and a small number of student-led households.
• The sample also included households with one or more household member who:
  • is older (defined for these purposes as 65 years or older)
  • is from the Black and Minority Ethnic (BME) community
  • has a physical disability
  • has a long-term or life-limiting illness
  • is an EU or other non-UK national.

2.5 Participants' current or previous housing circumstances were also varied:

• While some had only been living in the PRS for a matter of months, others had been renting in the sector for between 1 to 5 years or for 6 or more years. The longer-term tenants included a small number who had lived in PRS accommodation for more than 20 years.
• In terms of their current tenancy, some tenants had lived in their current home for 12 months or less. This group included a number of student households, households in receipt of LHA and households containing children. Tenants living in urban areas also tended to have been in their current accommodation for a shorter period. Those living in smaller towns or rural areas tended to have been living in their current tenancy for longer.
• As would be expected (given the range of both locations and property sizes and types) rent levels varied considerably. The range was between £280 and over £1,000 a month, with the mean rental charge around £540 per month.

Landlord participants

2.6 A total of 43 landlords took part in the research. In terms of the principal type of area in which landlords owned properties, there was an even spread across urban, smaller town and rural areas. The specific locations in which rental properties were located included: Aberdeen, Dumfries, rural Dumfries and Galloway, Dunblane, Dundee, Edinburgh, Falkirk, Glasgow, Kirkcaldy, Inverness, Livingstone, Motherwell, Perth, rural Perthshire, Portree and St Andrews.

2.7 There was also an even spread between smaller, medium-sized and larger landlords. Amongst the smaller landlords (those who owned one property), some identified themselves as being, or having been, a reluctant landlord. The mean number of properties owned by medium-sized and larger landlords was 6 and 120 respectively. The largest portfolio exceeded 600 properties.

2.8 Landlords were split relatively evenly between those who defined themselves as full-time or part-time landlords. Full-time landlords tended to have larger property portfolios and to have been landlords for longer. They were also less likely to use the services of a letting agent. A small number of landlords were also lettings agents themselves.

2.9 Other points to note about the landlords who participated in the research are that:

• They ranged from those who manage their properties entirely themselves through to those who make use of a full management service provided by a letting agent or factor.
• There was a considerable range in the length of time participants had been a landlord, from around 6 months to over 30 years.
• A small number of the landlords were not-for-profit organisations that own a small number of properties that are available to rent to clients.

Opinion drivers

2.10 Below we summarise a range of other factors that appeared to influence participants' views on either the current tenancy regime or on possible changes to the regime. These included their previous experiences, other routes by which they had acquired knowledge about the sector and their future plans.

Previous experiences

2.11 As would be expected, the views of both tenants and landlords were very clearly influenced by their previous experiences of operating within the sector. In terms of tenants' previous experiences of living within the sector:

• While some tenants had lived in 3 or more other PRS properties before moving into their current home, for others their current home was their first experience of living in the PRS.
• The average length of previous tenancies was very varied; a number had stayed for only 6 months, whilst at the other end of the spectrum a small number had lived in the same tenancy for 10 or more years.
• Reasons for choosing to move on themselves were varied and included moving for work or study reasons, relationship formation or breakdown, problems with neighbours, rent increases and the condition of the property.
• A small number had experience of being asked to leave a tenancy by a previous landlord. The primary reason for being asked to leave was the landlord selling the property, although a small number did not know why they had been asked to move on.

2.12 The experiences of landlords broadly mirrored those reported by tenants. In particular:

• A relatively small proportion of tenancies had come to an end after an initial (usually 6 month) period.
• Most tenancies were brought to an end by the tenant and for many landlords their only experience of tenancies ending had been when tenants chose to move on.
• When landlords had brought a tenancy to an end this had generally been associated with non-payment of rent. On a small number of occasions a landlord had brought a tenancy to an end because of damage to the property or anti-social behaviour.

Other sources of knowledge or information

2.13 Whilst their own personal experiences (as either a tenant and/or a landlord), clearly influenced participants' views, many participants also drew on the experience of others. Many had also accessed information about the sector through more formal routes to information, such as professional bodies or advice agencies (see para 2.16 below).

2.14 The experiences of others appeared to be particularly significant amongst landlords and often focussed on the difficulties of repossessing a property if there were significant problems with the tenancy. This led some to have significant concerns about what might happen should they need to repossess a property, although many had no direct experience of needing to do so themselves.

2.15 Although particularly evident amongst landlords, some tenants also drew on the experiences of others within their circle of family and friends or within their community. As with landlords, having heard about the negative experiences of others appeared to create a wariness that they could find themselves in a similar situation in the future.

2.16 There was also a more formal set of routes through which participants had acquired their knowledge about the sector. These tended to be more extensive for landlords and included information provided by professional landlord bodies or local authorities, or acquired through attending landlord awareness-raising or training sessions. A number of landlords also referred to the extensive information that is available via the internet, including that provided by the Scottish Government. For larger, professional landlord organisations there was also a body of learning from within their own company to be drawn on. The role and influence of both agents and solicitors was also clear, particularly amongst smaller and/or part-time landlords but also occasionally among tenants. Some tenants also reported having sought information on the internet, from their local authority or from a voluntary sector organisation (such as a rent deposit guarantee scheme or a disabled persons' housing service).

2.17 The specific impacts of information being sourced through various routes will be highlighted elsewhere within the analysis. However, it is of more general note that a number of landlord participants highlighted the role of established practice and norms within the industry - particularly, for example, in the choice of tenancy being used. However, despite these 'industry norms' there was also a range of understanding about key legislation and its implications for landlords' practice.

Future plans

2.18 It was also clear that participants' plans for the future tended to inform their views on a range of tenancy-related issues; this was particularly the case in relation to some tenants' views on security of tenure (this issue is discussed further within Chapters 4 and 5 of this report).

2.19 Very much reflecting the diversity of the tenants overall, future plans varied considerably. However, tenants tended to fall into one of two broad groups. The first group generally saw the PRS as a short to medium-term option. This shorter term, transitional group included students, young professionals and others who had made recent work-related moves. This group:

• Generally expected to move into the owner occupied sector at some point in the future.
• Included a small number who had left the owner occupied sector, generally because of a work-related move. It also included a small number who still owned properties in other areas and in some cases were renting out these properties - in other words they were both tenants and landlords. These tenants generally expected to either return to the property they currently own, or to buy another property, at some point.
• Included a number of students or younger people who were in the early stages of living independently. Most of these tenants had previously lived in the owner occupied sector. They tended to expect to make a number of other moves in the PRS before choosing or being able to buy a property, although a small number were in the process of looking to buy a property of their own.

2.20 The other group generally anticipated staying in the PRS in the longer-term. This group:

• Included a small number who were 'born and brought up' in the PRS and anticipated that they would continue to live in the PRS. These tenants tended to live in rural areas with little or no social rented sector supply and did not anticipate they would be able to afford to buy a property in that area.
• Had previously had a social rented sector tenancy but had given up that tenancy and moved into the PRS. Reasons for giving up a social rented tenancy included concerns about neighbours and the neighbourhood or the unsuitability of the property (for example its size or accessibility). Those within this group tended to either have concerns about returning to the social rented sector or doubted that the social rented sector would be able to supply a property that met their needs.
• Had generally grown up in the social rented sector but had not been able to access their own social rented sector tenancy or had been unable to sustain a tenancy. Those within this group perceived they had little or no prospect of being offered a social rented sector tenancy in the foreseeable future (either because of the high-pressured market in which they were looking for a home or because of their housing history).

2.21 A considerable majority of the landlords who took part in the research expected to continue operating as landlords for the foreseeable future. This included a small number who had initially been reluctant to become a private landlord but, having been through the necessary processes, had decided to continue letting out their property rather than seeking to sell.

2.22 However, a number of landlords did raise several factors that could influence their decision to remain as a landlord, or which might influence a decision to increase or decrease the number of PRS properties they own. These included:

• The tenancy regime itself (these issues, in particularly in relation to length of tenancy and the basis on which a property can be repossessed are discussed further within Chapters 3-5 of this report).
• The availability of accessible and affordable financing options - both in terms of interest rates and the conditions associated with buy-to-let mortgages.
• Returns (either in terms of income or asset value) being at a level that makes being a landlord a reasonable or good investment decision. In addition to possible changes to the tenancy regime, the introduction of Universal Credit and changes to the Energy Performance regulations were also cited as having the potential to undermine the overall viability of their businesses.

2.23 On an associated point, a small number of landlords voiced concerns that, simply by conducting a review into the tenancy regime, the Scottish Government was introducing an unwelcome level of uncertainty, and that this uncertainty could have a potentially negative effect on investment in the sector.

Emotion-related factors

2.24 Finally, there was a range of other 'softer' factors that appeared to influence views on the tenancy regime. In particular, it was evident that there were sometimes very powerful emotions at play, despite the letting or renting of a property essentially being a business transaction.

2.25 For a small number of participants there were very strong and powerful attachments to a specific property. From a landlord perspective, this sometimes translated into needing to trust a tenant to look after a very precious asset. These attachments to a property tended to stem from it being a former family home that had been inherited and/or a property in which the landlord had previously lived themselves. In the latter case, landlords sometimes had an expectation that they would return to live in the property at some point in the future.

2.26 From a tenant perspective, some participants had formed very clear and considerable attachments to the property they were currently living in or reported having formed such an attachment with a PRS property they had lived in in the past. Sometimes this was about having brought up their family within the property, although for others it was simply that they were living in a property they would very much have wished to be their own but were unable to afford to buy. For some tenants this then translated into a sense of gratitude towards their landlord for renting them the property. Equally, a small number of landlords expressed gratitude that their tenant(s) had looked after a property well.

2.27 Underpinning many of these relationships were issues of trust. Whilst they were perhaps at their strongest when property-related attachments were also in play, they nonetheless appeared highly significant to many other landlord-tenant relationships. From a landlord's perspective, landlords spoke of trusting a tenant to look after their property and pay the rent as agreed. Smaller or medium sized landlords sometimes appeared hurt or angry when they felt that trust had been betrayed. Equally, when their trust had been repaid they sometimes spoke of trying to help out their tenant - for example by being flexible in relation to notice periods or by being flexible if the tenant was struggling to pay the rent for some reason.

2.28 Equally, some tenants also spoke of trusting their landlord to deliver the service and to treat them fairly. The focus was very often on the landlord maintaining and repairing the property in return for receiving the rent they were paying. When this was not happening, tenants often spoke of feelings of frustration and powerlessness.

2.29 This issue of power and control was perhaps the single greatest influence on tenants' views on the tenancy regime. More specifically, when tenants felt they had options - which generally translated into having the economic wherewithal to exercise real choice within the market - they tended to see things differently to those who saw their choices as limited or felt that they had no choice at all.

2.30 However, the issue of power and powerlessness did not apply only to tenants. Some landlords also spoke of powerlessness, particularly in relation to dealing with a tenancy that had broken down. The desire to avoid these feelings of powerlessness and frustration often appeared to influence tenant selection and certainly appeared to feed in to some views of tenancy length for example.

2.31 Finally, it should be noted that despite emotions sometimes running high, a number of participants did try to make objective judgments and to 'see the issue from both sides of the fence'. Those with recent experience of being both a landlord and a tenant tended to be particularly inclined to consider both positions. However, a range of other experiences, such as landlords with adult children renting in the PRS or tenants who have friends or family who are landlords, also inclined participants to consider alternative perspectives on the issue.