What the English Housing Survey says about private renting

Originally posted on August 2 on my blog for Inside Housing.

The second in a series of blogs looking at the latest English Housing Survey considers the state of the private rented sector in 2016/17.

Home to a fifth of us

The private rented sector has doubled in size over the last 20 years from 10% of households in 1996/97 (2.1m) to 20% in 2016/17 (4.7m). Most of the growth took place after 2003.

To put that growth into perspective, the private rented sector now accommodates a greater share of households than at any time since 1970. As recently as 1997, following rapid decline in the 1970s and 1980s, it was half the size of the social rented sector.

Generations Rent?

Our idea of Generation Rent – the notion that the growth of private renting heavily concentrated among the under-35s – is now looking  a bit out of date.

It partly depends on whether you look at the number of households in each age group – given the increase in the sector highlighted above, it’s hardly surprising that private renting grew among all age groups except the over-75s in the last 20 years – or the proportion.

The number of 35-44 year old households who are private renters has tripled in 20 years to 1.1m and they now account for 24% of households in the sector compared to 16% in 1996/97. By contrast, 16-24s fell from 24% to 16% over the same period and the proportion of 25-34s living in the sector has remained stable at 32%.

In front of the children

The same contrast is evident when we look at different types of household, with growth in numerical terms seen across the board but proportionately highest among couples and lone parents with dependent children.

One-person households accounted for 37% of private renters 20 years ago but just 27% now while three- and four-person households saw significant growth.

Incomes and rents

As with social tenants, more private renters are in work (63% full-time and 13% part-time in 2016/17) than 20 years ago (54% full-time and 9% part-time). Alongside that, there has also been a marked decline in the proportion of private renters who are retired (14% to 9%) and unemployed (9% to 4%).

However, where social renting is heavily concentrated in the lowest two income quintiles (73% are in the lowest 40% of earners), private renting is much more evenly spread across the income distribution. The proportion of private renters in the lowest income quintile has fallen from 29% ten years ago to 21% – putting even more strain on social housing.

The mean private rent was £196 a week in 2016/17, almost double the mean social rent of £102.

However, incomes in the sector are also much higher: £617 a week for the head of the household and their partner compared to £354 for social renters; and £696 a week in household income compared to £403.

Some 22% of private renters received housing benefit in 2016/17, of whom almost half were working. Only 19% of those receiving housing benefit said it fully covered their rent (compared to 51% of social renters).

Private renters were much less likely to be behind with their rent (9% in 2016/17) than social renters (28%).

They spent 34% of their household income on their rent including housing benefit and 37% excluding housing benefit. Both these figures are higher than for social renters, despite their lower incomes.

The rent burden was unsurprisingly highest for private renters in London and for lone parent households with children.

What was that about the bedroom tax?

When ministers introduced the bedroom tax they never tired of reminding us that they were only doing the same as Labour did in the private rented sector when it brought in the Local Housing Allowance.

The rules were of course very different and the restrictions only applied to new tenants but it’s still interesting to see what has happened to under-occupation (on the English Housing Survey’s more generous definition).

Over the last 20 years, under-occupation in the private rented sector fell from 17% to 15% but it fell much faster in social renting (from 12% to 8%). By contrast it increased among owner-occupiers from 39% to 51%.

A mixed picture on tenant satisfaction

As I highlighted in the first blog in this series, private renters are more satisfied with their accommodation and the way their landlord carried out repairs than social renters.

However, private renters come up with a very different answer when they are asked about their tenure. Here they are much less satisfied (68% very or fairly satisfied) than social renters (83%) and owner-occupiers (98%).

On the move

Just over half of households who moved home in 2016/17 were private renters (up from a third 20 years ago).

Churn (moves within the sector) increased from 465,000 households and 57% of private rented sector moves in 1996/97 to 860,000 and 72% in 2016/17. This reflects the sector’s traditional role and its short-term tenancies. However, this number has been falling recently – there were a million moves within the private rented sector in 2014/15.

On average, private renters had lived at their current address for 3.9 years. This spell ranged from less than a year for under-25s and 2.3 years for 25-34s to 9.1 years for 65-74s and 17 years for over-75s, some of whom will still have pre-1996 secure tenancies.

Asked why they moved, private renters were most likely to cite job-related reasons (16%), wanting a larger home (13%) and wanting to move to a better neighbourhood (11%). All of these came ahead of being asked to leave or given notice by their landlord (10%).

While the private landlord lobby will highlight those results in the political battle over the need for longer tenancies, we may hear rather less from them about the main reason for moving given by private renters aged 65-74. Of those who had moved in the last three years, 30% said it was because of their landlord giving notice.

Conditions improve

Physical conditions in the sector have improved markedly in the last 20 years, partly reflecting a rise in the number of newer homes in the sector.

In 1996, for example, 39% of private rented homes were rated in the bottom two energy efficiency bands. By 2016, that proportion had fallen to 7%, which may also reflect the fact that new lettings of Band F and G homes have been banned since April 2018.

Over the last 10 years, the proportion of private rented homes that are non-decent has fallen from 47% to 27%. However, before the sector gets too complacent it might want to consider first that the non-decent rate was half that in the social sector and second that the numberof non-decent homes has remained constant.

Advertisements

What the English Housing Survey says about social renting

Originally posted on July 18 on my blog for Inside Housing.

The first in a series of blogs looking at the detailed findings of the latest English Housing Survey considers what the social rented sector looked like in 2016/17.

Nothing has changed

For the third year in a row the survey shows that there were slightly more social homes than 12 months before but the sector is still housing a steadily smaller proportion of the population.

Social housing’s tenure share was down to 17.1% in 2016/17, with housing associations accounting for a slightly higher 10.3% and local authorities falling again to 6.8%. The slow decline – from 21% in 1997 – means that social housing now houses a smaller share of the population than at any time since the early 1950s.

Everything has changed

The survey obviously covers the year before the Grenfell Tower fire and so only hints at some of the issues that will be covered in the imminent (we hope) social housing green paper.

The positive news for landlords and tenants is that the survey shows that fire safety in social housing is generally higher than in other sectors: 1% of housing association and 2% of local authority homes had a significantly higher than average risk of fire compared to 4% of owner-occupied and 6% of private rented homes.

But that will not be of much comfort when the pre-2017 system did not even consider the possibility of inflammable cladding, shoddy construction work and (as the Housing, Communities and Local Government Committee points out today) a regulatory system riddled with conflicts of interest.

Read the rest of this entry »


The state of owner-occupation

Originally published as a column for Inside Housing on September 5.

The decline of owner-occupation in England resumed in 2015/16 after a brief uptick in the previous year.

The English Housing Survey shows that owner-occupation as a whole fell below 63% to return it to levels last seen in 1985, when the Right to Buy and Margaret Thatcher’s drive for a property-owning democracy were in full flow. The ownership rate is now down eight percentage points on its peak in 2003.

However, even that conceals the full scale of the decline. Owner-occupation is made up of two very different groups – people who own their home outright and those who are buying with a mortgage – and the split between them has changed radically over time.

Here are some key points that I picked out from the English Housing Survey for 2015/16:

1) Owning’s rise…

Outright ownership is still rising as people who first took out a mortgage 25 years or more ago pay it off. From 25% of households (4.5 million) in Mrs Thatcher’s heyday, it has grown to overtake mortgaged ownership two years ago and reach 34% (7.7 million) in 2015/16.

Read the rest of this entry »


The state of private renting

Originally published as a column for Inside Housing on August 2.

As home ownership and social renting continue to decline, the astonishing rise and rise of the private rented sector continues.

But who is the sector housing and what are the consequences for tenants? Here are a dozen key points that I picked out from the English Housing Survey for 2015/16.

1) Overall growth

One in five of us – 4.5 million households – now rent from a private landlord. That is 2.5 million more than in 2000.

2) Age

Growth continues to be fastest among young people as high house prices stop them buying and social housing is in short supply.

The proportion of 25 to 34 year olds renting from a private landlord has increased from 24% to 46% in the last ten years. As recently as 1991, just 12.9% of 25-34 year olds were private tenants.

That figure is for households, so it could well mask an even stronger growth in the number of individual young people renting as more of them share.

The average private renter household reference person (HRP – the oldest or highest-earning person in the households) is 40, making them much younger than social renters (52) and owner-occupiers (57).

However, since the financial crisis private renting has grown among all age groups, with sharp increases also seen among the 35-44s, 45-54s and 55-64s.

Read the rest of this entry »


The state of social housing

Originally published as a column for Inside Housing on July 19

Results from the English Housing Survey last week provide a detailed snapshot of who lives where and in what sort of conditions and how they feel about it.

The picture that emerges of social renting is not exactly a new one but it also confounds many of the stereotypes about the sector and the people who live in it.

Here is a baker’s dozen of the highlights that I picked out from the survey showing the state of the sector in 2015/16:

1) The overall picture: The social rented sector was home to 3.9m households in England – 2.3m with housing associations as their landlord and 1.6m with local authorities.

That total has stayed broadly the same for the last three years but the English Housing Survey does not separately identify a rising number of affordable rent properties (an estimated 123,000 by April 2015).

As home to 17% of households, social renting is now comfortably behind private renting (20%).

Read the rest of this entry »


Five things we learned from the English Housing Survey

Originally published on March 2 on my blog for Inside Housing.

So what have we learned from the new English Housing Survey? The largest annual survey of households and housing conditions is just out for 2015/16 and here’s what caught my eye.

1) ‘The fall in owner-occupation has abated’

The official story is one of relatively little change this year: the number of owner-occupiers seems to have stabilised at 14.3m and there were still 3.9m social renters. The survey says that ‘the rate of owner occupation has not changed since 2013-14, indicating that the fall in owner occupation has abated’. Here’s the graph summing up the trend:

However, that’s not the full story. First, a note of caution: the 2013/14 survey had sampling issues that probably exaggerated the fall in home ownership and rise in private renting in that year. As a result last year’s survey showed a surprise fall in private renting and slight rise in owner-occupation that was hailed as a turning point by the government. Private renting resumed its rise in 2015/16, with the number of private renters up 250,000 at 4.5m.

2) But mortgaged ownership falls below 30%

The picture changes again if you look at the proportion of households in each tenure rather than the number. The survey shows that the owner-occupation rate fell to 62.9%, the lowest it’s been since 1985, while private renting rose from 19.0% to 19.9% and social renting fell slightly to 17.2%. Decline abated? Not so much.

Read the rest of this entry »


Home ownership: Decline and rise?

Originally posted on February 18 on Inside Edge 2, my blog for Inside Housing

At first sight, headline results from the English Housing Survey published on Thursday are very good news for Brandon Lewis.

As the housing minister was quick to point out, the survey shows 2014/15 was the first year since 2003 when the home ownership rate in England did not fall. And, as this graph also shows, private renting fell for the first time since 1999:

tenure

He might also have pointed to this graph showing a surprise turnaround in the tenure prospects of Generation Rent:

graph

The fall in ownership over the last 10 years has been most marked among young people, so this increase in ownership among the 25-34s in 2014/15 and decline in private renting is a marked reversal of that trend.

On the face of it then it’s good news for ministers in their quest to revive the property-owning democracy and bad news for doom-mongers (like me). Perhaps all those dire predictions that we are on course to become a nation of private renters are wrong? Maybe Help to Buy really is working? Did Labour commission the Redfern Review into the decline of home ownership to look at a problem that no longer exists?

Read the rest of this entry »