Buy-to-let landlords have reason to celebrate as new research reveals that tenants are staying in their rental properties for longer than ever before, reducing costly turnover and ensuring a steadier income stream.
According to a study by the Deposit Protection Service (DPS), tenants now remain in their rental homes for an average of 910 days—approximately two and a half years. This marks a significant increase from previous years, with tenancy lengths rising steadily from 789 days in 2021 to 882 days in 2023. The trend suggests that more tenants are opting for stability rather than frequently moving house.
Lower Turnover, Stronger Returns
For landlords, long-term tenants mean fewer expenses associated with advertising vacancies, conducting viewings, and managing the administrative burdens of new tenancy agreements. Minimizing void periods is key to maximizing rental income, and landlords who retain tenants for extended periods often enjoy a more passive investment with fewer disruptions.
The DPS report also highlights a sharp decline in tenant mobility. In 2024, just 20% of renters reported moving home, a dramatic drop from 46% in April 2023. Additionally, more than half (54%) of tenants surveyed in October 2024 had lived in their rental property for between one and five years, up from 42% in March of the same year.
Rising Rents Keep Tenants in Place
One of the primary reasons behind the extended tenancy durations appears to be the increasing cost of renting. Many tenants are choosing to stay put to avoid the financial burden of rising rental prices and the hefty deposit requirements that come with moving. Higher moving costs, coupled with a shortage of available rental properties, have further contributed to tenants delaying relocation.
Landlords participating in the DPS survey echoed this sentiment, with 35% reporting that the number of applicants for their rental properties had remained steady, while another 35% noted an increase in demand. Furthermore, 17% of landlords observed that tenant demand had roughly doubled in the past year, with 13% stating demand had more than doubled—particularly in high-demand areas.
Financial Pressures Easing for Tenants
Despite the rise in rental costs, the survey found that fewer tenants are struggling financially due to rent payments. Fewer renters reported having to cut back on essentials or luxuries, a shift attributed to strong wage growth and an easing in some aspects of the cost-of-living crisis.
With tenants staying in place longer and demand for rental properties remaining high, the buy-to-let sector continues to offer promising returns for landlords, particularly those who prioritize tenant retention and property management efficiency.