24 March 2009

Individual landlords dominate rental market in Scotland

Research from the University of Sheffield has shown that the large majority of private rented housing in Scotland is owned by individual landlords rather than large-scale companies, despite deregulation in 1989. The findings have been published by the Scottish Government as part of its review of the role of the private rented sector in Scotland’s housing market.

Professor Tony Crook and Dr Ed Ferrari, from the University’s Department of Town and Regional Planning, in collaboration with Professor Peter Kemp at the University of Oxford, were commissioned to review the supply of private rented housing in Scotland. In particular they were asked to examine the structure of ownership and the policies and practices of private landlords. Their findings have been published as part of the Government review.

Amongst the key findings are:

• A large majority of dwellings, 84 percent, are owned by individuals. This proportion has increased significantly since the early 1990s. The average size of portfolios has fallen to just two dwellings.
• Just under three quarters of all addresses are now regarded as investments, compared with 43 percent in 1992-1993. 52 percent have landlords who regard their rent as sufficient to cover their costs and give a return, compared with 31 percent in 1992-1993.
• Landlords reported little difficulty letting properties. Many are willing to let over the long-term, but concerns about getting possession mean they mainly let on short assured tenancies.
• Although some landlords would be willing to let to homeless people and families under specific rent guarantee and management arrangements, there is considerable concern about how such policies might operate in practice.
• There was much criticism of the new UK-wide policy arrangements for housing benefit, with many landlords saying they would now only house those on benefits as a last resort.
• Landlords continue to hold positive views about the sector but still feel that the law does not adequately protect them against tenants who refuse to leave; and nor do they think it is any easier for them to find out how the law affects them.
• The prospects for the sector appear in general to be positive, with an expectation that most landlords will be staying in the sector and that a minority will modestly expand their portfolio.

Professor Tony Crook, who led the research team, said: “Our Scottish findings are consistent with the results of our other work in Britain. The supply of private rented housing has grown considerably since deregulation in 1989 and is increasingly dominated by small-scale individual landlords. They now have more confidence in the legal framework and about the future of the market and there are good prospects that the sector will modestly expand.

“However this is still a ‘cottage industry’ and the hope of governments in both Westminster and Edinburgh, that large scale corporately owned landlords with funding from the major financial institutions would emerge after deregulation, has not been realised. To achieve this objective presents new challenges to governments throughout Britain."

Notes for editors:

The report is entitled 'Scottish Government Review of the Private Rented Sector - Volume 3: Views and Experiences of Landlords in the Private Rented Sector in Scotland' and is published by the Scottish Government at:

• Scottish Gorvernment Website