25 years of supporting buy to let: How the market has transformed

For 25 years, at Hamilton Fraser we’ve made it our mission to protect landlords, tenants and agents.

The lettings market has undergone a complete transformation since buy to let took off in the late ‘90s and we’ve been there every step of the way to make sure that with every new law, government policy and shift in best practice, our customers – whether they’re letting, renting or managing properties – have been properly covered.

We cover a lot of ground here, but you can skip ahead using the menu below:

How have things changed for landlords over the last 25 years?

There’s no doubt that increased legislation, higher taxation and periodical ‘backlashes’ against the role that landlords play in their community have all made landlording more difficult over the years. But at the same time, there have also been changes that help protect and support good landlords as they carry out their day job.

 25 years of supporting buy to let: How the market has transformedBack in 1996, a landlord could only secure ordinary homeowners’ insurance, which really wasn’t fit for purpose.

Although it gave basic cover for things like damage caused by the elements, it didn’t provide any real reassurance in the areas where a landlord typically needs cover, including malicious damage by tenants, loss of rent, liability insurance and help with disputes.

The launch of Hamilton Fraser Total Landlord Insurance changed that – and other insurance providers then followed suit, giving landlords bespoke protection now and into the future.

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Over the last 25 years, many stories of rentals going wrong have hit the headlines. Usually they’re about bad landlords, but we know there are also times when tenants cause damage. Sometimes that leads to an insurance claim, but often landlords just need to deduct the cost of repairs from the tenant’s security deposit, and that’s fair.

However, there has definitely been a shift towards a better balance of fairness between landlords and tenants and it’s just as important to make sure no landlord can keep a tenant’s deposit without a good reason – hence the Government’s introduction of deposit protection legislation.

This means that today, both landlords and tenants are protected and if there’s any disagreement, the final decision about how much of a deposit is returned to the tenant is made by an independent third party.

You may be surprised to know that nearly three million deposits are now protected for both landlords and tenants, of which our own mydeposits scheme has protected in excess of 1.1 million.


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As successive governments focused more and more on improving standards in the lettings sector, this put pressure on landlords to stay up to date with the ever-changing legal requirements.

Many landlords made the decision to outsource the letting of their property – and often management as well – to an agent, but through the early 2000s there was very little protection. If an agent was negligent or just didn’t provide a good service, there was very little a landlord or tenant could do about it.

As a result, the Government introduced an ombudsman scheme, giving landlords (and tenants) a free and independent complaints system when agents didn’t deliver as they should.

25 years of supporting buy to let: How the market has transformedSince 2014, all letting agents have legally had to belong to one of the government-approved redress schemes – which includes our own Property Redress Scheme.

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This was followed by new legislation requiring all letting agents to have client money protection insurance, and to go with this, good agents would typically have professional indemnity insurance too. That ensures landlords and tenants are covered for any monies lost – including rent and maintenance funds – if the worst happens and an agent goes bust or misappropriates the money they hold.

Probably the biggest challenge for landlords over the last 25 years has been staying up to date with lettings legislation – and it’s a challenge that’s going to continue.

There are currently 168 laws governing the letting of a property. During COVID, we tracked that landlords had to cope with 47 rule changes – in just 18 months! This makes keeping up with legal obligations almost a full-time job for landlords.

Luckily, there are now some excellent landlord associations around the UK that will help you stay up to date with changes that affect you. 25 years of supporting buy to let: How the market has transformedAnd it’s worth subscribing to our own LandlordZONE knowledge website – a completely free resource that keeps you posted on the latest news, rules and regulations so you don’t miss anything.

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As the laws have changed to give tenants greater and greater protection against eviction – especially given the changes that have happened during the pandemic – it’s never been more important for landlords to be able to regain possession of their property when they need to.

Although the law does allow for this, there are very specific processes that need to be followed, and if landlords get any part wrong – either in terms of timing or paperwork – it can cause huge delays and they’ll often have to start the whole process again from scratch.

And that’s why specialist eviction companies  – such as Landlord Action, headed by our own ‘landlord’s friend’, Paul Shamplina – provide further support to help landlords evict tenants safely and legally when things do go wrong, or when a landlord simply needs their property back to live in or sell.

In celebration of 25 years of the private rented sector, we’ve produced the ‘history of renting’ and information about our own journey.

Listen to Hamilton Fraser’s Property Podcast episode, ‘Happy 25th birthday Hamilton Fraser and the private rented sector‘ where Eddie Hooker and Paul Shamplina discuss the journey as pioneers and innovators.

But here, we’re taking some time to look at life from a landlord’s perspective, starting off by speaking to Patrick Jacobs, one of our first ever landlord insurance customers – who, we’re delighted to say, is still with us! We’ll follow that with a review of how the private rented sector has more than doubled in size and the impact this has had on the work involved in letting a home.

Finally, we look forward to the future, securing thoughts on what’s next from key experts at Hamilton Fraser.

So, whether you’re a well-seasoned landlord or just thinking of dipping your toe in the rental waters for the first time, we hope this story of the lettings journey – past, present and future – provides some insight and a lot of encouragement. Here’s to the next 25 years!

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Interview with Patrick Jacobs, landlord - and our client for 25 years

Patrick Jacobs was one of our first ever landlord insurance customers and we’re delighted to say that he’s still insured with us. We asked Patrick about his landlord journey, his thoughts on what’s great about being a landlord and what he’d like to see changed.

Q. How did you end up being one of Hamilton Fraser’s first landlord clients?

A. As a landlord in the 1990s it was really hard to secure buildings insurance cover for rentals and one insurance company told me they wouldn’t be renewing my policy as they were pulling out of underwriting all let properties. I had to ring around every broker I knew and eventually met with one of the founders of Hamilton Fraser, Simon Fox – at my dining room table!

At the time, I was treasurer of the Small Landlord Association, which was a forerunner of the National Landlords Association. So we struck a deal and, with Eddie Hooker on board, landlord insurance suddenly got a whole lot easier.

I’ve rarely met a businessman with such a total grasp on his business, marketplace, and such great personal skills.

Patrick’s thoughts on Eddie Hooker, CEO of Hamilton Fraser, with whom he subsequently worked as a fellow director of mydeposits.

Q. Why did you originally invest in buy to let?

A. I was a bit of a property geek from a young age – I used to enjoy finding building sites to visit, even on holiday! By chance, I studied population changes in my A level economics course and, realising the 60s’ baby boom was happening and house prices could only go one way – up – I decided not to go to university and started investing in property.

Q. What was the first property you bought to let?

A. It was a run-down 1930s, three-bed, two-reception end of terrace, similar to my parents’ place just around the corner. I paid just under £30,000 in December 1980 and let rooms on a B&B basis for £130 per month.

Q. Do you know what it’s worth today?

A. Yes, I do – one just sold in similar condition for £460,000. So my prediction that prices would go up was correct! I expect rent-wise it would achieve around £400 a month for a room.

Q. 25 years ago, what was the hardest thing about being a landlord?

A. Advertising for tenants back then led to a tsunami of calls – just one ad would keep my phone ringing for weeks.

Q. What’s the hardest thing about being a landlord today?

A. At the moment it’s the opposite, with a real lack of enquiries. I have to spend time chasing bad payers and then there are complex court proceedings and delays when you have to take action.

Q. What do you love about being a landlord?
It’s easy to say the capital growth, which, since I started, has been tremendous. But what’s also been great is that I’ve become good friends with many of my tenants and I’m still in touch with some of them after 20-30 years. Believe it or not, I’ve even been asked to be the best man for two of them!

Q. What is the one change you’d like to see to make landlords’ lives easier?

A. I know for sure that I and many other landlords would never want to go down the eviction route if we could find another solution. The main reason we would evict is if we weren’t being paid, there was damage to the property or the tenants were causing problems with neighbours.

And when we do have to evict, for both our and the tenant’s sake, it would be good to see a simplified court process, so everyone understands timings and there is some clarity and certainty for everyone.

“We could never have predicted the pace of change we have witnessed over the last 25 years. We have responded by doing everything we can to protect landlords and tenants during their rental journey – and will continue to do so. Thank you to everyone who has made Hamilton Fraser the success it is, and for joining us on our 25-year journey.”

– Eddie Hooker, CEO at Hamilton Fraser

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Some Hamilton Fraser Total Landlord Insurance facts and figures

Since 2005, we have processed more than 10,160 claims to help landlords and tenants get back on their feet after a disaster.


Our first ever claim: Storm damage

High winds caused some serious damage to a three-storey property, which required scaffolding to replace fallen tiles. The claim was for £1,145. In 2020, average storm claims are roughly £1,500 – around 30 per cent higher.

What are most claims for?

Most claims we receive are for escape of water, like burst pipes or water damage. Back in 2005, we paid out a total of around £130,000 for water damage,  but as more and more people have taken out our landlord insurance, by 2020 that had risen to over £500,000!

What factors affect claim costs?

There are lots of different issues that can increase or decrease claim costs over time, for example inflation and changes to weather patterns, as well as new categories being added to claim under.

Most recently, we’re seeing costs rise due to materials going up in price quite significantly. And we’re also still seeing the knock-on effect of two problems caused by COVID lockdowns.

Firstly, it was difficult to secure tradespeople and, secondly, some tenants didn’t want the work to be carried out due to shielding. Both of those issues led to a backlog of remedial works through most of the last 12 months.

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The growth of the private rented sector: Was it led by supply or demand?

There’s been a lot of talk over the years about landlords buying up properties at the expense of first-time buyers getting on the ladder, suggesting that landlords are ‘forcing’ people to rent rather than buy. And, as the chart below shows, there is no doubt that the private rented sector has been the main growth tenure since the 2000s.

25 years of supporting buy to let: How the market has transformed

However, our experience and knowledge tell us that the real reasons for the growth in the private rented sector are varied. That’s why, despite recent government efforts to curb the growth of the private rented sector in favour of home ownership, we think private renting  is here to stay and will continue to grow into the future.

The reality is, many people on both low and high incomes need and want to rent.


So why has the private rented sector doubled in size?

Looking back at the changes in the private rented sector since the late 80s and early 90s, we believe the drive to increase renting in the UK came initially from the Conservative Government under Thatcher, and demand for rental homes has been fuelled by various different policies and world events ever since.

The catalyst for change was the selling off of around 2.8 million council houses, which is almost half of our social home stock. Once owned, these properties were then either passed onto future generations or sold and, according to a report from Inside Housing, around 40 per cent of these are now rented privately.

And, as the chart above shows, although there has been some decline in home ownership, the biggest proportional fall versus the growth in the property redress scheme is undoubtedly social housing.

With social housing availability almost halved over the last 40 years, people on benefits still need somewhere to rent. Just under 900,000 households renting privately are currently on benefits and, according to the official waiting lists, there are over a  million on council waiting lists – although the National Housing Federation suggests this could be as high as 1.6 million. They estimate there are 1.5 million people in need of social housing who are currently living in the private rented sector.

Fast forward to the late 1990s and more demand for rented housing was added through Labour’s 1999 pledge, setting a target of “50 per cent of young adults going into higher education in the next century.”

Although this took until 2019 to achieve, there’s no doubt that the rapidly-growing student market required huge numbers of homes for students to rent privately – either from individual landlords (including investment-savvy mums and dads), institutional investors or from universities themselves.

And new demand for rental property kept coming. As the European Union added more member states, freedom of movement allowed more foreign nationals to come to the UK. One early report estimated this would increase net immigration by 5,000 to 13,000 per year, however, when most EU countries imposed controls in the early 2000s, it meant those that didn’t – Britain, Ireland and Sweden – ended up with the lion’s share of migrant workers, estimated at millions.


Economic crash drives demand

One unexpected cause for growth that we noticed – and it’s rarely talked about – is the 2007/8 credit crunch, which had quite a significant impact on rental demand.

By 2008/9 in England, the private rented sector accounted for approximately 14 per cent of households, with 68 per cent being owner occupiers and 18 per cent of households delivered by the social sector. This was a 40 per cent  increase in the size of the private rented sector since the early 2000s.

As the earlier chart shows, the credit crunch was the next big driver of market growth and by 2016/7 the proportion of homes provided by the private rented sector had risen to 20 per cent  – an increase of over 43 per cent  in just eight years.

Since then, tenure proportions appear to have settled and it’s perfectly normal to see a plateau after a period of growth. By 2019/20, owner occupation represented 65 per cent of households – a small rise – with the private rented sector at 19 per cent and the social sector at 17 per cent.

And the rental market has remained buoyant, which is no surprise. Although three regions – London, the South and the South East – saw house prices continue to rise in line with inflation, most areas hadn’t seen big increases until this last year.

The North East is a case in point. At the start of 2021, the average house price was just one per cent higher than in 2007, 14 years earlier. The chart below shows how prices fell in the credit crunch and hadn’t actually recovered until this year.


25 years of supporting buy to let: How the market has transformed


If prices aren’t rising, there’s little incentive to buy and tenants are more likely to remain in rental accommodation. We believe this is a key reason why, in areas that have actually become more affordable, we’ve still seen a decline in the numbers of first-time buyers.

In addition, many regions around the UK saw property prices fall from 2007 through to 2013 – and beyond. Few first-time buyers would be brave enough to buy in a falling market that wasn’t showing any signs of improving and, as a result, they carried on renting.

People will still need to rent privately in the future

The reality is that people rent for lots of reasons. For some it may be an affordability issue, but for others it simply doesn’t make sense to buy, such as students, employees who don’t plan to live long term where they currently work, and those testing out a new life following a relationship break-up.

And we shouldn’t forget that many people simply don’t want to buy – renting is a tenure they choose to live in, for a whole host of reasons, including:

  • greater flexibility to move and travel
  • testing out a new relationship
  • not wanting to compromise their lifestyle by saving for a deposit
  • being able to rent a better property than they could afford to buy

There are also a huge number of tenants paying in excess of £1000 a week for prime and over £5,000 for super-prime properties. Clearly, they don’t have an affordability issue and probably even own one or more homes of their own – they’re simply renting for convenience.

25 years of supporting buy to let: How the market has transformed

Moving forward, the need for properties in the private rented sector can only grow.

As our landlord Patrick mentioned, population has a big impact on demand for all tenures, and with the UK’s population growth expected to reach around 70 million by mid-2029 and 72 million by mid-2041 – an increase of 2-4 million people – it’s clear the private rented sector is not only here to stay, but will have to grow in order to deliver the homes people need and want.

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A pandemic: Agents, landlords and tenants pull together

The last 12 months is likely to have been a game changer for the property market.

Firstly, dealing with letting agents, landlords and tenants on a daily basis – especially due to the eviction restrictions – we know that there’s been a huge increase in communication. We have reported on some amazing ‘heroes’ – landlords who have helped out their tenants in difficulty.

And some incredible tenants have not only helped each other, but also worked with the landlord when cleaners or tradespeople couldn’t enter the property, or landlords weren’t able to show people around.

In our continued efforts to support agents, landlords and tenants, we launched the Property Redress Scheme tenancy mediation service to help solve the kind of problems that the law didn’t cover.

It’s this kind of increased communication within the industry that has led to the majority of people in lettings surviving remarkably well over the last 18 months.

The second big change is where people choose to live, now that more organisations and companies are happy for employees to work at home.

It remains to be seen whether people are really trading city living for country life – the latest reports suggest people are actually coming back to the cities.

However, what we do know is that, in general, both buyers and renters are chasing houses more than flats.

This isn’t a new trend, but it’s certainly been exacerbated by lockdowns, as people have recognised the importance of having private outside space. And we believe this may influence investors’ decisions moving forward, whether expanding or reducing their portfolios.

Although we’ve been able to take some positives from the pandemic experience, we know that it hasn’t been easy for many tenants, landlords and letting agents.

That’s why we’ve supported initiatives for a comprehensive package of financial support and are continuing to work with the likes of the NRLA and others to lobby the Government and ease the burden on the courts system when landlords have to evict.

25 years of supporting buy to let: How the market has transformed