Study – standards in British rental properties rapidly improving

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Housing Conditions:

A study* carried out into the British rental market by AXA Insurance shows that standards are beginning to improve, but safety is still an issue.

Since 2014, the government has been implementing a whole raft of new legislation aimed at UK landlords and the standards in their rental properties. The amount of new regulations introduced by the UK Parliament and devolved governments aimed at improving the lot of tenants has been unprecedented.

Some interesting statistics on the English rental housing sector produced by the latest available English Housing Survey reveal that:

• 5m households are in PRS. That’s 20% of all households. Up from 12% in 2006
• 24% of private renters receive housing benefit, but only 5% had their full rent covered by HB
• 74% were working
• Households in the PRS spend around 35% of their income on rent. 45% in London, 32% excluding London
• 71% found it “fairlyâ€� or “veryâ€� easy to pay their rent which falls to 41% in London
• 9% of private renters had been in arrears in the last year, compared to 25% of social renters
• Average weekly rent is £184 overall: £300 in London, £153 outside London
• 66% of private renters have no savings. Of the 1/3 who do, 41% of them were under £5,000
• The average tenancy length 4.3 years
• 82% of tenants were satisfied with accommodation. 10% dissatisfied, compared to 13% of social renters
• Of those who had repairs carried out in last 12 months, 18% were dissatisfied with how it was done. Compared to 22% of social renters
• Of tenancies that were brought to an end, 73% were because the tenant wanted it to. 11% were ended by the landlord. Only 2% left because of rent increase
• Of those 11% ended by LL, 63% were because the landlord wanted to sell or use the property (but could be skewed)

Government measures starting to take effect

The rental market insurer AXA has been tracking progress over the past four years, and its findings paint a rather positive picture with “significant leaps forward in landlords’ professional standards, but safety is still compromised in too many rentals, it says.

“Despite a broadly improving picture, the private rental sector still has catching up to do on important areas like fire and gas safety. Every rental property requires an annual gas safety inspection – but just 58 per cent have had this check in the past 12 months.

“Four in ten tenants, meanwhile, say they do not have smoke alarms installed, despite landlords being legally required to fit them on each floor of a property. This is still a marked improvement on 2014, prior to the rule being introduced, when six in ten tenants lacked them.

Landlords providing these essentials – 2018 compared to 2014

• A written Tenancy Agreement – 81 per cent (up from 73 per cent)
• EPC (provided) – 33 per cent (up from 19 per cent)
• Current gas safety certificate – 58 per cent (up from 30 per cent)
• Inventory of contents – 41 per cent (up from 36 per cent)
• Smoke alarms (on each floor) – 59 per cent (up from 42 per cent)
• Carbon monoxide alarms – 34 per cent (up from 27 per cent)

Two other requirements that UK landlords must provide to tenants are an Energy Performance Certificate (EPC), and (in England and Wales) the Government’s ‘How to Rent’ Guide, informing them of their rights and responsibilities.

As yet, only one-third of tenants say they have seen the EPC (up from 19 per cent in 2014), and just 15 per cent of those eligible say they have received the Government’s mandatory guide.

Of course, these are essential documents to be provided if the landlords is to be able to provide a valid section 21 notice, so many landlords are placing themselves in a precarious position should they have trouble and need to evict.

The recent legislation introduced by government has considerably increased pressure on landlords to raise their game. But AXA finds there is still little awareness among tenants of their basic rights and entitlements:

• 75 per cent of tenants surveyed did not know that their landlord is legally required to ensure a minimum energy rating for the property under the recently effective (April 2018) MEES regulations.
• 89 per cent of landlords placed the responsibility to keep chimneys swept on the tenant when in fact it is a landlord’s responsibility.
• AXA found that given their survey replies, it estimates around 150,000 rental properties nationwide are illegally failing to meet minimum Energy Standards – EPC minimum of E energy rating.
• However, 70 per cent of rental properties now fall into the A-C bands for energy performance, but ‘cold hazard’ is still rated the number one health risk associated with living in private rented accommodation.
• 50 per cent of tenants surveyed said they felt their rental property negatively impacts their health, most citing cold, damp or out-of-date heating systems.

An Improving Situation

This latest survey however gives a rather up-beat picture, with change taking place; landlords are upgrading their properties at a rapid rate, with figures jumping on smart meters in particular.

Energy-saving features in rental properties

• All windows double-glazed – 78 per cent (up from 73 per cent)
• Smart meters installed – 26 per cent (up from 14 per cent)
• Roof insulation – 34 per cent (up from 32 per cent)
• Solar panels – 2 per cent (up from 1 per cent)

Gareth Howell, Managing Director, AXA Insurance, says:

“Landlords are getting more professional, and we are seeing standards rise in British rentals, driven by legislation and desire of landlords themselves.

“We know that many start out as ‘accidentals’, and there is a big learning curve for them at the start, particularly as legislation changes so often.

“We find that both landlords and their tenants lag behind, so public awareness campaigns are vital to correct myths and promote new rules and standards. Gas and fire safety should be the priorities here: our research suggests that millions of properties are not compliant with today’s laws.�

*Figures are based on a survey of 2,000 UK tenants conducted in August 2018 by AXA Insurance.

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