Tenants turned landlords: one in six renters sublet their home Tenants turned landlords: one in six renters sublet their home

Tenants turned landlords: one in six renters sublet their home

Our research reveals that one in six tenants in the UK admits to having rented out part or all of their property to someone not on the lease agreement.

  • North West has the highest number of ‘sub-letting tenants’
  • A quarter of sub-letters did not check the terms of their lease before sub-letting, while a third haven’t informed their landlords
  • Expected growth in number of sub-letters across UK as rents rise

New research by landlord insurance provider Direct Line for Business1 reveals that one in six (17 per cent) tenants in the UK admits to having rented out part or all of their property to someone who isn’t on the lease agreement.  A quarter (25 per cent) of tenants who sub-let their property didn’t check the terms of their lease to see if it was permitted, while over a third (34 per cent) had not informed their landlord of the decision.

Of the sub-letters who did not inform their landlord, a fifth (23 per cent) got found out in the end anyway.  The consequences when landlords catch tenants sub-letting can be severe. In 11 per cent of cases the tenants named on the lease were evicted with six per cent losing their deposit in the process. Other repercussions include landlords increasing rental charges (22 per cent), issuing a fine (14 per cent) or issuing a formal warning (eight per cent).

In spite of this, Direct Line for Business’s research reveals that 2016 could see an increase in the number of people sub-letting their properties. One in six renters (15 per cent) claim they are thinking about sub-letting part or all of their rented property by advertising on property letting websites such as Airbnb .

Nick Breton, Head of Direct Line for Business said: “The average monthly rent across  the UK currently stands at £7392. This means on average, approximately a third of people’s income goes towards accommodation3. With the market having seen a five per cent increase in average rents in the last year, it seems that a larger number of renters are tempted to offset this expense by sub-letting their properties.”

Over the last two years, Landlord Action have seen an 18 per cent increase in the number of instructions from from landlords with sub-letting cases.

Paul Shamplina, Founder of Landlord Action commented, “Sub-letting is fast becoming one of the leading grounds for eviction, alongside rent arrears and Section 21 for possession only. This has been fuelled by sky high rents preventing some tenants from being able to afford even single-unit accommodation, forcing many to resort to bedsits or shared accommodation. 

Organised sub-letting scams are also becoming more prevalent, where tenants, or sometimes even fake tenants, advertise properties and rooms on holiday/accommodation websites in order to cream a profit without the landlords’ consent.”

When looking at who the properties are sub-let to, friends or recommendations (both 28 per cent) are the two most common types of sub-lets. Family members account for just over a fifth (21 per cent), while 19 per cent of renters have sub-let to strangers responding to an advert.

Sub-letting is most common in the North West and West Midlands, where more than a quarter (27 per cent) of private tenants say that have sub-let their properties. London (23 per cent) is third, while renters in the South East (nine per cent) and Northern Ireland (seven per cent) are least likely to sub-let their properties 1.

Table One:  UK regions most likely to rent out part or all of their privately rented property

Region Percentage of tenants who have rented out part or all of their property

North West

27%

West Midlands

27%

London

23%

Yorkshire & Humberside

19%

North East

18%

Scotland

15%

East of England

14%

Wales

13%

South West

12%

East Midlands

10%

South East

9%

Northern Ireland

7%

United Kingdom

17%

Source: Direct Line for Business

Nick Breton continued: “There could be some serious consequences for tenants who sub-let, but landlords need to be aware that in these circumstances there could also be insurance implications. Sub-letting is not covered under most insurance policies, so it’s really important that landlords make their tenants fully aware of the restrictions on the lease and maintain that communication that can help prevent any future breaches”.

For further details on Direct Line for Business landlord insurance visit https://www.directlineforbusiness.co.uk/landlord-insurance

Notes to editors

1 Direct Line for Businesses’ research conducted by Opinium amongst 573 UK adults who rent from a private landlord between 15th to 21st January 2016. Percentages for the West Midlands, North East, Scotland, East of England, Wales and Northern Ireland are indicative due to low base sizes.

2 HomeLet Rental index, December 2015

3 Average monthly salary of £2,301, based on the provisional 2015 salary figures from the Annual Survey of Hours and Earnings (ASHE), published 18thNovember 2015

Citigate Dewe Rogerson
Amrit Nijjer
Tel: 020 7282 2803
Email: amrit.nijjer@citigatedr.co.uk

Direct Line Group
Jade Trimbee
PR Manager
Tel: 01372 839 452
Mobile: 07825 315 931
Email: jade.trimbee@directlinegroup.co.uk

Direct Line for Business

Launched in 2007 Direct Line for Business provides a range of insurance products for the small business sector direct by phone or online.

Direct Line for Business insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Direct Line for Business and U K Insurance limited are both part of Direct Line Insurance Group plc.

Customers can find out more about Direct Line for Business products or get a quote by calling 0345 301 4827 or visiting www.directlineforbusiness.co.uk

Landlord Insurance Press Release

Added: 22nd February 2016