When discussing the rental market in Malta, emotions tend to run high. Much of the discussion is informed by anecdotes of some horror story or other – whether it is about a “greedy landlord” or a “problem tenant”.
But while such stories make good headlines, they are not sufficient to inform policy and legislative reforms.
Despite the fact that the residential leases market is thriving, very little research has been done to understand what landlords and tenants in Malta were experiencing following the introduction of the Residential Leases Act in 2020. Indeed, very little work had been done to uncover the socio-economic profile of Malta’s landlords and tenants at all.
With this in mind, we wished to conduct a scientific study which would systematically sample landlords and tenants and gauge their experiences, satisfaction and awareness levels. To do this, no fewer than 800 participants were interviewed, randomly drawn from the rent register of the Housing Authority.
In summary, the study reveals that practically all landlords are Maltese. Their average age is higher than that of the general population in Malta and, in fact, almost a third are retired. The educational level of landlords is similar to the average of the Maltese population. Renting is a part-time endeavour for four out of five landlords and four out of 10 landlords own only one property.
In contrast, three-fourths of the tenants are third country nationals, 17 per cent are EU nationals and just one in 10 of the tenants are Maltese.
Tenants tend to be younger than the average Maltese, and nine out of 10 tenants are active in the labour market. Almost half of tenants have a tertiary level of education, which is significantly higher than the educational level in Malta. Several have property overseas.
The profile of landlords and tenants is significantly different from that which dominated in prior rental regimes and from that which may still inhabit the public imagination (e.g. the established landlord who inherited generations of wealth versus the working-class Maltese tenant on social welfare).
Indeed, it is worth noting that persons benefiting from social housing do not form part of the residential market surveyed because they are not subject to the Residential Leases Act at all.
The rental market has evolved into one where many tenants share residences with others (not necessarily family) and have a tendency to move around: around a third of tenants had changed places three or more times prior to the current one.
No desire to invest further in the rental market
Moreover, a third of the tenants state they are only in Malta on a temporary basis, though an equal amount state they intend to settle here.
On the other hand, the status among landlords is more stable. Although most indicated no desire to invest further in the rental market, the majority also expressed no desire to shift out of the market either, whether it is to sell their properties or to shift into short lets. Indeed, the majority of them indicated a willingness to renew existing contracts.
All in all, the majority of landlords and tenants expressed a preference for a one-year contract duration. However, around a third of respondents are in favour of longer – two and even three-year contracts.
In this regard, the latest data from the rent registry of the Housing Authority show that tenancy duration has gradually increased since the establishment of the register in 2020, partly because of contract renewals and partly because of longer contracts at inception.
Some key insights emerge for policy-makers. For instance, in terms of awareness levels, landlords were more knowledgeable than tenants – signalling a potential to improve communication. Tenants are more satisfied than landlords with the services offered by the Housing Authority and real estate agents. Notably, tenants are far more satisfied than landlords with the way they feel their rights are being protected.
A study like this would have been enriched by open-ended questions and a broader range of questions, but a telephone interview comes with time constraints, and this limited the number of questions that could be asked. These issues can be addressed by continued research and consultation in the area, which we encourage.
The study has now been published by the Housing Authority Policy Unit and comes at a time when the Residential Leases Act is being debated in parliament.
Marie Briguglio, Brian Micallef and Tiziana Gauci are economists at the University of Malta, Housing Authority and Central Bank of Malta respectively.