Tenant and landlord experiences of the Maltese residential rental market : three years after the introduction of the Residential Leases Act

Abstract

This study was conducted with a view to understanding the demographic and socio-economic nature of tenants and landlords in Malta and to gauge their experiences, satisfaction and awareness levels, following the introduction of the Residential Leases Act in January 2020.

The study involved the collection of primary data from tenants and landlords using computer-assisted telephone interviews with quantitative data being analysed using statistical methods. A total of 800 participants, drawn at random from the residential rent registry, aged 18 years or over, of multiple nationalities were interviewed. Of these, 400 responses were drawn from tenants and 400 from landlords.

In summary, the study reveals that practically all landlords are Maltese (97%), with only 2% coming from other EU countries and 1% being third-country nationals (TCN). The average age of landlords in Malta exceeds that of the general population and almost a third (30%) are retired. Landlords aged over 50 years manage two-thirds of the residential rental stock. The educational level of landlords is similar to the average of the Maltese population. Four out of ten landlords are able to make ends meet easily.

When it comes to the rental experience, the median gross rental income for all landlords stood at €12,000. Eight out of ten landlords own one to four rental properties each (totalling 57% of the properties), and four out of ten own only one Renting is a part-time endeavour for four out of five landlords (80%). Among those for whom rents were the main source of income, one in five rely on just one property.

In contrast, only 10% of tenants are Maltese, 17% are EU and 74% are TCNs. The average age of the tenant population is lower than that in Malta at 37 years. Nine out of ten tenants are active in the labour market. Almost half of tenants (46%) had a tertiary level of education which is significantly higher than the 26% of the general population and that of landlords. Around a third of tenants report a monthly household income of €3,000 or more and similarly a third say they are easily able to make ends meet. However, another third say they find it difficult to make ends meet and over 15% of tenants receive housing benefits from the government.

For tenants, the experience is characterised by sharing residence with others and a tendency to move around properties: around a third of tenants had changed places three or more times prior to the current one. A third of the respondents are only on the island on a temporary basis, while another third intend to settle in Malta and purchase their own property. Though the preferred contract duration by both landlords and tenants is of one year, around a third of respondents are in favour of longer-term contracts, in particular two and three-years contracts.

In terms of satisfaction, tenants are more satisfied than landlords with the services offered by the Housing Authority and real estate agents. Tenants are also far more satisfied than landlords with the way they feel their rights are being protected, signalling scope for improvement. On the other hand, there was no difference in the level of satisfaction with the rent received and paid when comparing landlords and tenants. The vast majority (70%) of landlords are likely to hold their current property portfolio as is, and do not intend to invest in further property or to switch to short-term rentals. Many (73%) stated they were highly likely to renew the rental contract with current tenants.

Awareness about the Residential Leases Act is mixed but higher among landlords (particularly about the existence of the Adjudication Panel and minimum contract duration). In general, respondents were aware about the obligations surrounding utility bills, wear and tear, and lease renewal. On the other hand, there is considerable confusion about the legal duration of shared spaces contracts and the possibility to raise rents in a new contract. Respondents are also unaware of the need to use registered letter for contract termination. Taken as a whole group, on average, landlords passed the knowledge test with a rounded-up score of 6/12 while tenants failed the test with a score of 4/12. The lack of knowledge of basic aspects of the residential leases act signals a potential to improve communication. Direct emails are both tenants’ and landlords’ preferred medium.