The Renters Reform Bill will change the balance of power between landlords and tenants. With no more fixed-term contracts, landlords won’t be able to tie in tenants for the first 12 months, and it will be up to the tenant to decide how long they rent a particular property for. If they’re not happy, they’ll be able to leave with two months’ notice whenever they like. Landlords will want to attract good tenants because it will be far harder to evict bad choices after the Bill abolishes Section 21.
To succeed in the brave new world of the Renters Reform Act 2024, landlords will need to attract and keep good tenants who are happy with not just the properties, but also with the service provided by the letting agent or landlord.
In the words of management consultants, Bain & Company: “Leading companies know that great products are necessary but not sufficient. In today’s world, you have to deliver great customer experiences”.
Renters are the direct customers of landlords and the indirect customers of letting agents. Whether we have a small or large portfolio, having happy customers means that so much of the hassle involved in being a landlord disappears. The secret to having happy tenants is to understand what they value and to have the renter experience at the heart of our decision-making processes.
In this blog post, I pull together data from different research to explore what tenants are looking for, and how to keep them happy.
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Quick links: How to attract good tenants and keep them happy
1. Provide high quality properties
Providing renters with high quality rental properties is the first step in having happy tenants. However, it seems that many landlords have a way to go.
Trajectory Partnership carried out research in July 2023 for OSB Group and the Landlord Leaders Community (of which I’m a member), and published the results in the report, A Future Tenant Standard. This research shows that a majority of the renters surveyed are happy with the quality of fixtures, fittings, furniture and white goods. However, there’s still a long way to go, as looking at the figures another way, 48% are not happy with the quality of white goods and 40% are not with the quality of fixtures and fittings. 26% of the surveyed renters weren’t happy with the most basic of requirements, somewhere secure to live.
Buying cheap carpets, white goods and other fixtures and fittings are a false economy. As they don’t last as long, they require more management intervention to replace, and more hassle for tenants. When I buy carpets for my buy to lets, I choose ones with a 10 year life.
Another concerning statistic in the research is that 20% of tenants say the poor quality of the property has impacted their health. This tallies with the finding in the 2021 English Housing Survey that 23% of private rented property doesn’t meet the Decent Homes Standard, with 14% having a HHSRS Category 1 hazard. This is unacceptable and I hope the new PRS Decent Homes Standard and PRS Database due to be introduced by the Renters Reform Bill will help reduce this number.
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2. Provide things that tenants value
When making decisions about how to upgrade rental properties and what policies to adopt, it’s important to know what tenants value.
In September 2023, Rightmove analysed 600,000 property listings on their portal to see which features led to the highest number of enquiries to letting agents from renters. As you can see from my categorisation in the table below, 4 of the top 10 reveal concerns about keeping heating bills low. This corresponds with the research from the Landlord Leaders COmmunity.Next are the practicalities of transport and storage, with a modern open plan layout trailing at number 10.
This shows why it’s important for landlords to prioritise energy efficient features when planning refurbs. Not only is it good for the planet, but these features will be appreciated by tenants. Also, it pays to highlight a new boiler or storage space in property listings, even though they might not seem as important as the latest Quooker Fusion boiling water tap.
|Top features in descriptions for rental properties
|1. Double-glazing for windows
|2. Smart tech, such as smart heating system (eg Google Nest)
|3. Near railway station
|4. Parking space
|5. Basement or cellar
|6. New boiler
|9. Energy efficiency
|10. Open plan layout
However, research undertaken in March 2022 by the Social Market Foundation (SMF), sponsored by Paragon Bank (Where next for the Private Rented Sector?) gives a different perspective. The top 3 priorities for all renters are finding somewhere within their budget, followed by the number of bedrooms and access to outdoor space such as a garden. Research from the Property Academy in December 2023 lists having a garden in the top 5 of what’s important to renters. Outdoor space doesn’t even get a mention in the Rightmove research, which is why it’s important to look at a range of data.
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Just outside of the top 3 priorities for all renters in the SMF research is permission for pets. 17% of all renters seeing it as a top 3 priority now, and 22% predict they will do in the future. That’s a higher priority than off-street parking, noise level, modern appliances, double glazing, and privacy. I allow tenants to have appropriate pets (tenants in half of my rental properties have one small dog each). It’s also higher among younger renters (18-34), of whom 24% see it as a top 3 priority for 10-15 years’ time.
Tenants will soon have an implied right to keep a pet under the Renters Reform Bill. This is relatively simple for single let landlords to accommodate, especially if they are houses with gardens. Why not embrace it now, and think about how to mitigate the risk through a pet policy?
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3. Be caring, fair and trustworthy
Although letting agents are the “professionals”, the tenant research from OSB Group shows that the tenants of landlords who manage their properties themselves are considerably more likely to be feel the landlord is caring, fair and trustworthy than those who deal with an agent. Here’s a summary of the findings of OSB’s tenant research:
- 76% of private tenants who deal directly with their landlord say they believe their landlord cares about the level of service they receive compared to 49% of tenants who deal with an agent.
- Landlords are more likely to be perceived as fair if they have a direct relationship with their tenants as 82% of tenants who deal directly with the landlord say they are treated fairly, compared to 52% who work through an agent.
- Tenants are considerably more likely to trust their landlords where they have a direct relationship, with 72% of tenant saying they trust their landlord when dealing directly, as opposed to 43% dealing through an agent.
The results are very encouraging for self-managing landlords such as myself who build good relationships with tenants that go beyond the transactional and mere legal compliance. It’s more concerning for letting agents, many of whom need to improve the way they deal with tenants.
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4. Deliver a high quality service
Landlords and letting agents are in the service industry, and it’s good that 69% of tenants are happy with the speed of response from their landlord and 62% are happy with repairs. However, not all comply with their legal obligations, let alone provide a good service. Of particular concern is the finding that a sizeable majority of renters (59%) have experienced rule breaches, with 37% saying their landlord has cut corners on repairs.
Providing a high quality service and comply with landlords’ legal obligations are decisions that landlords make and have within their control. You can do this by either doing it yourself or choosing letting agents that maintain high standards and have a customer-focused attitude.
If landlords outsource management, they should check in with tenants to see if they’re happy. Landlords should go on inspections with the agents at least once a year to keep tabs on maintenance. Scrutinise inspection reports. Ask to see the lot of repair requests from tenants. Contrary to what some property trainers say, being a landlord is not passive income. If you want to have happy tenants, it’s your job to make sure they receive a quality service. If you don’t check up on your agents, how will you know if they’re doing a good job? Finally, if you’re not happy with them, go elsewhere. There are plenty of good ones out there.
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5. Have the right kind of communication and engagement
Landlords and renters have an ongoing business relationship which may be direct if the landlord self-manages, or indirect if the landlord outsources management to a letting agent. It is nevertheless an ongoing relationship, and communication is key. It’s best to start as you mean to go on, by setting expectations on the frequency of inspections (I find six monthly inspections work well) and whether you have any upgrade work planned, eg replacing windows.
Of course, tenants have a right to “quiet enjoyment” and landlords should rightly keep their distance as much as possible. This means giving lot of notice before arranging inspections, and asking permission to send their details to trades people to book in a time to do a repair. By doing this, it shows the landlord respects their privacy.
However, the landlord or agent should be available if there’s a problem. Tenants must be able to communicate easily with the managing agents or landlords, whether it’s via a portal or a WhatsApp group. The communication needs to be two-way, not just allowing them to report problems for them to seemingly disappear.
Respond promptly when they contact you, even if it’s just to say what action you’ve done eg you’ve contacted the plumber or ordered a new fridge.
Keep tenants updated on progress when they report a repair, as sometimes it can take a while to get the relevant trade to come and do a small job or something might need to be ordered. Also, give tenants lots of notice of inspections and offer different times and dates for them to choose. It shows that you value their time and respect their other commitments.
Also, with many landlords selling up, tenants are increasingly anxious about a Section 21 notice coming through the front door. If you’re not planning to sell, reassure them. If you do plan to sell, give them as much notice as possible and be flexible if they want to leave early.
Increasing rent is another worry for renters. If you plan to put the rent up, which is reasonable in a period of high inflation, have a dialogue with them so they can plan for it. Don’t just send a Section 13 notice. A good time to do this is in person during a mid-tenancy inspection.
Even if you use an agent, it’s a good idea to attend at least one inspection a year with the agent so that you can see the condition of the property yourself, and speak directly to the tenant. As well as getting direct feedback from them, you can reassure them you’re not going to be selling up in the foreseeable future and that (for instance) you plan to keep rent increases around wage inflation.
You provide your tenants with a home. It’s not the same as selling them a subscription to a media platform or selling them a gadget. Whether you’ve got a big portfolio or you’re an accidental landlord, showing tenants you care is an important part of making them feel valued and keeping them happy.
Finally, research from OSB Group published in February 2024 showed that the overwhelming majority of landlords (75%) are “engaging or planning to engage with tenants to understand their needs better and foster positive relationships”. 68% are spending more time thinking about the tenant experience. This is positive news. Thinking about the tenant experience and engaging with tenants to understand their needs should be the norm for landlords. Even those with small portfolios.
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In any business, having happy customers is the key to long-term sustainable success. It’s no different for landlords.
Invite feedback from your tenants to see if they’re happy, and how you can improve the service they receive. This is important for all landlords, but particularly those who use managing agents. And when they leave, encourage them to rate you and/or your letting agent on Marks Out Of Tenancy.
By supplying high-quality housing, attending to repairs promptly, treating tenants fairly and providing a quality service, good landlords will have nothing to fear from the abolition of fixed terms. They’ll be able to keep good renters as the renters will be happy and will want to stay. Having happy tenants makes being a landlord a pleasure!
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