Transcript Slide 1

The private rented sector: its
contribution and potential
Dr Julie Rugg
Centre for Housing Policy
University of York
 Review outcome: a clearer picture of private
renting
 Difficulties attached to the formulation of
policy
 Implications for local authorities
Review principles
 Mindful of misinformation and stereotyping
 Attention to definition
 Question evidence bases and where possible
provide fresh data/analysis
Buy-to-let mortgages
 In 2007, 46 per cent buy to let mortgages were
remortgages
 No exact data on increase in landlord numbers
 Increase in proportion of landlords giving
‘investment’ as their motive for letting
The roles of renting in housing
biographies #1
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The image of a youthful, mobile,
better educated sector hides substantial
tenant diversity
The PRS plays an essential role in
‘oiling’ the housing market and easing
transitions from tenure to tenure
The roles of renting in housing
biographies #2
• 21 per cent of private renters are ‘new’ households, wanting to
live independently or moving in with a partner
• 16 per cent of private renters are full-time students
• 9 per cent were renting from employers
• 22 per cent of private renters who moved in the last three years
did so for work-related reasons
• 35 per cent of moves from owner occupation to private rental
were a consequence of relationship breakdown
• 40 per cent of renters had been at their current address for a year
or less; 63 per cent of those were in full-time employment, and
another 13 per cent of those were full-time students
• Just over a fifth of private renters had been in their current
address for five or more years
Niche markets
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‘Young professionals
Students
People in receipt of LHA/HB
Slum rental
Tied housing
High-income renters
Immigrants
Asylum seekers
People in temporary accommodation
Regulated tenancies
Understanding the private rented
sector
 Diverse sub-markets
 Sub-markets not mutually exclusive
 Spatial variation
 Expansion in one part of the market may
mean contraction in another part
PRS as % of all households, London boroughs
London: patterns of private
renting
Equal intervals
Greater London
6.2 - 13.5
Enfield
13.6 - 20.7
20.8 - 28.0
Barnet
28.1 - 35.3
Waltham Forest
Harrow
Haringey
Redbridge
Havering
Brent
Islington
Camden
Hackney
Hillingdon
Bark & Dag
Newham
Ealing
Wstminst
City T. Hamlets
Newham
Ham & FulKens & Chel
Greenwich
Southwark
Lambeth
Hounslow
Richmond UT
Wandsworth
Bexley
Lewisham
Richmond UT
Merton
Kingston UT
Bromley
Sutton
F
0
1,500
3,000
6,000
9,000
12,000
Meters
< Double-click to enter text >
Croydon
London PRS: diversity in rental
demand
% of PRS FT students, London boroughs
Equal intervals
Greater London
5.2 - 9.3
Enfield
9.4 - 13.5
13.6 - 17.6
Barnet
17.7 - 21.7
Waltham Forest
Harrow
Haringey
Redbridge
Havering
Brent
Islington
Camden
Hackney
Hillingdon
Bark & Dag
Newham
Ealing
Wstminst
City T. Hamlets
Newham
Ham & FulKens & Chel
Greenwich
Southwark
Lambeth
Hounslow
Richmond UT
Wandsworth
Bexley
Lewisham
Richmond UT
Merton
Kingston UT
Bromley
Sutton
F
0
1,500
3,000
6,000
9,000
12,000
Meters
< Double-click to enter text >
Croydon
Housing benefit in the open market PRS
Extent of housing benefit tenants
living in the open market PRS
within Greater London
Quartile percentages
7.1 - 11.0
11.1 - 17.5
17.6 - 28.4
28.5 - 47.9
Temporary use of the open market
PRS to house homeless households
Extent to which the open market PRS
used to house homeless households
within Greater London in 2001
Quartile percentages
0.0 - 0.9
1.0 - 3.2
3.3 - 6.3
6.4 - 18.1
Rental market classifications
 Number and type of dominant rental markets
 Degree of spatial concentration of particular type of sub-market
 Supply-side characteristics: property type and condition; mix of
landlord types
 Labour market trends: seasonal employment, long-term
unemployment, industrial decline
 Size of the open-market PRS and extent of tied lettings,
‘institutional’ student market
 Proportion of private rented stock at different rent levels
 Size of social housing sector and relative affordability of owner
occupation
PRS policy: one size fits all?
Substantial market variation
Unintended consequences become commonplace
Tenant needs/wants vary substantially
Variation in landlord motivations create difficulties in
devising incentives
Issues for local authorities:
professionalising rental housing
management
 Lack of reliable evidence on mismanagement
 Spreading the policing workload
 Role of accreditation
 National licensing: landlords
 Tenancy relations officers: co-ordination role?
Issues for local authorities:
improving property quality
 Poorer property condition in the PRS
 Extension of regulatory regime
 Policing property quality: managing agents
 Competition at the bottom of the PRS
Issues for local authorities:
sustainable tenancies
 ‘Churn’ in sector represents short-term uses
for private renting
 BUT there is a need for greater policy support
for tenancies – particularly tenants in receipt
of LHA
Length of time living at current address for private tenants on an assured
shorthold tenancy by gross household income quartile
Household income quartiles
All (%)
Lowest (%)
Lower mid
(%)
Upper mid
(%)
Highest (%)
Less than 5
years
80
85
91
93
88
5 or more
years
20
15
9
7
12
Total
100
100
100
100
100
Source: Survey of English Housing, three year average from 04/05 to 06/07.
Issues for local authorities:
homelessness prevention and
discharging homelessness duty
 Ever-expanding supply?
 Vulnerable households: why do tenancies fail?
 Market rents
 An equivalent housing offer?
Issues for local authorities:
managing ‘problem private renting’
 Student housing: is it a housing issue?
 Slum rental: excessive churn and tenancy
sustainability
 The challenge of PRS management
Selected recommendations
 Working within and between local authorities
 Social lettings agencies
 Light-touch licensing
A ‘credit crunched’ PRS
 Rents going up, rents going down? Insufficient
information
 Repossession rates
 Landlords wanting to buy but unable to secure
mortgages
 Some reluctant landlords
 Increasing unemployment amongst PRS tenants
and uncertainty in the LHA market
 Possible contraction in the migrant labour market
 Sector flexibility an innate strength