The purpose of this paper is to help landlords and property managers to understand what they can do to increase tenants’ satisfaction and propensity to renew their lease, and their willingness to recommend their landlord to other people.
This paper analyses almost 5,000 interviews with private rented sector (PRS) tenants in the UK, conducted over a four-year period, to investigate determinants of resident satisfaction, loyalty (lease renewal) and willingness to recommend their landlord. Statistical analysis is performed using respondents’ ratings of satisfaction with many aspects of their occupancy as explanatory variables. Comparisons are made between interviewees who renew their lease and those who do not renew.
The research finds that “ease of doing business” with their landlord is a strong predictor of residents’ satisfaction, loyalty and advocacy. Other key indicators for lease renewal include relationship management, rent collection and residents’ perception of receiving value for money. Tenants’ willingness to recommend their landlord depends mainly on their relationship with their landlord, how the landlord compares with tenants’ previous landlords and the property management service they receive.
Limitations to this research include the fact that the residents have a single landlord and live on a single estate, one with particular cultural significance, therefore potentially restricting the general applicability of the findings. Although the sample size is large, the number of residents who have reached the end of their lease is relatively small, because the estate has only been occupied by PRS tenants since 2014.
Over the past five years, the PRS has become a significant asset class for institutional investors in the UK. This research should help to improve the landlord – tenant relationship in the PRS, and to increase occupancy rates without compromising rents.
The large sample size in this research, and the use of repeat interviews at various stages of a resident’s occupancy, highlight early signs of discontent that a landlord can act upon to reduce the risk of a tenant moving elsewhere.
The author would like to acknowledge the help of RealService Ltd and its consultants who conducted the interviews upon which this research is based, and Get Living for its permission to carry out this research.
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