One important assumption underlying our research was that small portfolio landlords faced different pressures and needs than large portfolio and institutional ones. We wanted to understand how parameters such as portfolio size, environmental attitudes and debt could impact interviewees’ experiences. In total, we interviewed 13 participants for this project, with rental portfolios ranging between one and eight properties. Seven had only one property, while the other half of the cohort had between two and four or four and 8, with 12 being from England and one based in Scotland.

During the interviews, we first asked participants about their general experience as landlords, before moving on to their experiences with energy efficiency measures, and finally testing their response to the heat pump adoption scenario.

Approach to property management

When asked to describe their professions, 8 respondents described themselves as ‘landlords’ (either as their sole occupation or alongside another job). While an imperfect indicator, this suggested at least some degree of professional identity, a feature observed in all landlords with multiple properties we interviewed. By contrast, most single property landlords we interviewed reported a second profession and used their rental property as a side income.

In practice, those interviewees who identified as professional landlords were also more likely (in half the cases) to mention additional indicators of professionalisation, including access to specialist professions and networks. For example, one HMO landlord with multiple properties (Ted) mentioned his membership of Platinum Property Partners, an energy efficiency expert’s advice services and the Landlords National Purchasing Group (LNPG), through which he could access loans from other members; another had access to an accountant. While being a landlord was not his main source of income, Matthew was a letting agent who also adopted a more professionalised approach and outlook to his rental.

The professional landlords in our cohort often mentioned drawing on family as a source of support for maintenance and advice. For example, Hussein, Rhoda and Lauren all came from families who worked in a field related to property development or included landlords, and relied on their advice and services. Mary relied on her former spouse for help with doing repairs and upgrades to the property.

The majority of the landlords we spoke to (8 out of 13 interviewees) either managed their properties directly or only used letting agents on an occasional basis, either to look after a property located too far from their home (Ted) or after a breakdown in communication (Rhoda). The others relied on agents for all management and tenant relations, with 4 using agents to manage their properties and 1 to find tenants, suggesting landlords using letting agents were slightly overrepresented in our cohort. The findings of the English Private Landlords Survey show that a little under half of landlords (43%) report using an agent for letting services, but only one in five (18%) use an agent for management services. 63% of landlords with five or more properties use letting agents for letting services, a proportion that falls to 50% for landlords with two to four properties and only 30% of landlords with one property.

The legislative context impacted our interviewees’ future plans

Many interviewees felt negatively impacted by changing legislation, and raised the looming prospect of changing MEES in England, Wales and Scotland, and the Renters’ Rights Bill.

Multiple participants expressed fairly negative sentiment towards changes in legislation, with the exception of Viola, who was unaware of upcoming reforms, possibly due to relying on a letting agent for compliance. Participants often felt legislation was being ‘done’ to them. Amy, for example, told us: ‘I think government wants rid of landlords like me’. Four interviewees also argued these changes, coupled with rises in interest rates and a less favourable fiscal context, were driving them to make plans to sell or size down their portfolio, including Amy, who stated: ‘They're just making it too hard, the government.’.

This is consistent with existing evidence that English landlords’ concerns about tax, legislation and the profitability of their portfolio are leading them to plan to either sell up or decrease their number of rental properties, with decreasing numbers of respondents stating they were planning to relet their properties after their current tenancies end, from 75% in 2018 to 59% in 2024. It is difficult to gauge whether all landlords who say they plan to sell their properties will, and they may well sell to other landlords. In Scotland, the Scottish Household Survey shows the number of households reporting living in privately rented homes has decreased, from its peak of 15% in 2017 to 13% in 2023, although several underlying causes may have led to this outcome. In our interviews, for example, some landlords also discussed plans to sell their properties due to personal circumstances, such as a separation from a partner or nearing retirement.

The issue of landlords’ market exit has recently garnered political salience, with some organisations like the National Residential Landlords Association (NRLA), for example, reporting an increase in landlords selling their homes, an outcome that is frequently used as an argument to counter potential regulations. Several of our interviewees mentioned relying on landlords’ forums, with one mentioning the NRLA by name, and it is therefore highly likely that at least some of their views on government actions reflect their membership of this or other landlord bodies. For example, some landlords we interviewed discussed the adverse effect of landlords selling on their tenants, particularly if they were low-income, like Amy’s, who added: ‘I mean [my tenants] will struggle if I have to sell.’

We heard from some interviewees the view that landlords provide a necessary service, and that their exit would bring negative consequences - for example, Lauren, who stated: ‘I just feel like they don’t want landlords to exist. Where are people going to live?’

This view was also linked to interviewees’ underlying concerns about the ongoing profitability of their investment. Participants’ income ranged from a hundred per month to around £6,000 a year. This was the case for Valerie, for example, who reported being disappointed with her returns compared to investments.

The cost of the MEES regulations was the most frequent objection raised by landlords we interviewed, like Amy, who said, ‘But if they wanted me to spend 10,000 pounds on them, then I'll sell it.’ The proportionality of the legislation was another topic of criticism. For example, Amy had renovated her properties and felt the new regulations were excessive: ‘I've done everything possible that I can do in terms of like insulation, new boilers, double glazing.’ The new expectations placed on landlords sometimes caused concerns in some interviewees who worried about ‘getting it wrong’ or not meeting the new standards, like Valerie: ‘We will sell, because there's more regulations coming in. I'm also nervous that I might get it wrong.’

A perceived discrepancy between the government’s approach to the owner-occupied sector, compared to the PRS, was another source of dissatisfaction and tension. For example, Amy told us she was frustrated that new regulations meant landlords would be made to carry out works they would not have to do in their own homes: ‘The legislation is unreasonable. It goes above and beyond what... if you were living in it yourself? You wouldn't be doing it.’. Among the participants, Amy was one of a number of landlords we spoke to who expressed her intention to sell, and it is therefore unsurprising that her statements would reflect resentment towards regulations. However, this quote reflects a dynamic present in some other interviews: interviewees seeing themselves as providing a service sometimes seemed to resent the expectations and duties associated with running a business.

Attitudes to the Renters’ Rights Bill varied, with some even expressing support for legislation to curb poor behaviour from ‘unscrupulous people’, like Bea, who was also a tenant herself. However, most landlords we spoke to were more overtly negative in their response, and several saw the legislation as being against them. For example, Ted argued that the Renters’ Rights Bill was ‘not good for landlords, so I potentially might sell one or two of my buy-to-lets… partly driven by the lower returns’, while Hussein felt that ‘all the power is with the tenants’. Others also suggested that the legislation was likely to have a negative impact on tenants, like Matthew, who told us the ‘exodus of landlords’ caused by the legislation would end up ‘costing tenants more money, because it's a supply and demand situation.’

Landlords reported diminishing returns on their properties

Making a good investment was a key motivator to our interviewees, who either viewed their property as a direct income or to increase their retirement income. Many were concerned with diminishing returns, which they often linked to rises in interest rates and changes in taxation. One interviewee, Hussein, also mentioned concerns around capital gains tax and inheritance. In total, ten out of our interviewees reported a decrease in their income, with two planning to increase rents as a result. For example, Louis told us he could not make up for the shortfall when his mortgage repayments increased, despite increasing his rent by 10%: ‘10% didn't go up to the 90 pounds increase in the mortgage monthly expenditure.’ Matthew and William both described this change as having taken place in the last year, due to increases to their mortgage rates, while Dean claimed it had taken place ‘in the last few years’, citing changes to taxation and allowances which took place from 2017.

Some of the landlords we spoke to discussed using retrofit to command a higher rent: for example, Hussein and Ted had both modernised their properties to a high standard in order to target more affluent tenants. Ted explained his strategy was to renovate his properties so they would be ‘pretty high spec’ and rented out primarily to professionals. Despite this approach, he explained, his income had diminished: ’interest rates have gone up, so the yields used to be a lot better’.

With rents rising faster than inflation, however, this situation has worrying implications for tenants, particularly those on lower incomes. A few interviewees mentioned balancing increased outgoings with their awareness of the cost of living crisis and its impact on tenants. Amy, for example, claimed to have kept rents intentionally below market levels due to having low-income tenants. She was negatively affected by the new rules on tax relief due to being in the 40% taxation bracket, and felt the new rules brought little financial benefit to the government when compared with their potential impact on tenants. She described how ‘I just think for what benefit? For a couple of 100 quid extra. I'm going to drive out tenants that've been in 15 years.’ Similarly, when discussing her income, Valerie expressed a mix of discomfort at the prospect of putting up the rent and passing on costs to her long-term tenants (‘You know I can't pass all that on to my tenant, you know, so… Well, it's just unfair.’) but also an admission that ‘people don’t become landlords as charity’. Two landlords, Lauren and Valerie, indicated that they intended to increase rents.