State of the nation

Originally published on July 16 on Inside Edge 2, my blog for Inside Housing

Results from the latest English Housing Survey reveal some fascinating details about where and how we live and how much we pay for it.

Headline findings from the survey for 2013/14 were published in February. As I blogged at the time, they revealed the full scale of the shift in tenure: this was not just about private renting overtaking social renting but outright ownership overtaking buying with a mortgage.

The results published on Thursday provide much more detail on that and much more besides. Here are some details that caught my eye:

100 years of changing tenure

Most of the 20th century was all about the decline of private renting from a tenure that housed three-quarters of us in 1918 to less than 10% of us by the 1980s. Until then, social renting was expanding almost as quickly as home ownership but it retreated again in the wake of the right to buy. But the 21st century has seen a big decline in home ownership too and the rebirth of private renting:

shift

Moving? Meet your private landlord

One way to focus on the rapid changes over the last 15 years is to look at the tenure of people who have lived in their current home for less than a year. In 2013/14 there were 2.6 million households in that position, the highest number since EHS records began in 1984. Of those 59% moved into private renting, 27% into ownership and 14% into private renting. Note the big fall in recent movers who are owners since the credit crunch, though the proportion has at least recovered from a low of 20% in 2009/10:

movers

Kids? Meet your private landlord

Another big shift in the last 10 years is a sharp increase in the number of families with dependent children living in the private rented sector. The proportion of couples or lone parents with children who are private tenants has risen from 23% to 35% in the last ten years. The majority of those children were aged under 5:

Children

Paying the price

Households stuck as private renters are paying the highest housing costs: £176 a week in rent compared to £153 for people with a mortgage and £94 for social tenants. As a proportion of household income, the contrast is even starker. Even taking account of housing benefit, private renters were still paying 43% of their income in rent, compared to 29% for social renters and just 18% for mortgagors (who are benefitting from record low interest rates). This graph does not include outright owners (whose mortgage is obviously zero):

pay

And struggling to pay it

Some of the results hint at the struggles faced by tenants since the first wave of welfare reform. In the social sector, 15% of those who did not have their rent paid direct by housing benefit were in rent arrears in 2013/14 and a further 17% had fallen behind with the rent in the previous 12 months. In the private rented sector, only 4% were in arrears but a third said they had struggled with the rent. This graph (sadly not available for the social sector or for previous years that I can see) shows an alarming reason for difficulty in paying the rent:

difficult

More social tenants working

Contrary to the impression given by IDS and the Daily Mail, the last ten years have seen a significant increase in the proportion of social tenants who are in employment from 31% in 2003/04 to 37% in 2013/14. However, a third of those are in receipt of housing benefit (probably reflecting low paid work) compared to just a fifth ten years ago (for comparison, the proportion of private tenants in work and on housing benefit has doubled). Despite this, social tenants are on average by far the poorest households. The graph below shows the proportion of households in the different tenures in three income bands. One thing worth noting is the tiny proportion of social tenant households with an income of £700 or more. That’s £36,400 so it’s a fair proxy for the proposed Pay to Stay thresholds of £40,000 in London and £30,000 elsewhere.

earn

That’s just a quick glimpse at some of the key trends I spotted. You can find the full report here along with companion reports on fire safety and housing conditions. I originally wrote enjoy it while it lasts – earlier this year the government consulted on plans to cut the English Housing Survey back from an annual event to once every two years – but that was before seeing the news that it has been reprieved.

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