English Housing Survey – Private Rented Sector 2015-2016 released
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by Property 118

2 weeks ago

English Housing Survey – Private Rented Sector 2015-2016 released

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English Housing Survey – Private Rented Sector 2015-2016 released

The English Housing Survey on the Private Rented Sector (PRS) 2015-2016 was released yesterday by the Department for Communities and Local Government.

Click Here to see the full report

Despite popular propaganda most private renters move, because they want to with only one in ten asked to leave by their landlord.

73% of private renters said that their last tenancy ended, because they wanted it to and only 11% said that their landlord or agent ended the tenancy. Of the 11% asked to move 63%of the requests were because the landlord wanted to use or needed to sell the property.

The Main Findings of the report are below:

“The private rented sector remains the second largest tenure in England, and has grown in the last decade or so.

In 2015-16, 4.5 million households were renting in the private sector. This represents 20% of all households in England. Throughout the 1980s and 1990s, the proportion of private renters was steady at around 10%. However, the sector has more than doubled in size since then, and there are now 2.5 million more households in the private renting sector than there were in 2000.

The increase in the size of the private rented sector has been particularly pronounced among younger house holds who are now more likely to be renting in the private rented sector than to own a home.

Although younger people have always been over represented in the private rented sector, the proportion of younger people in this sector has increased over the last decade. The proportion of those aged 25 to 34 who lived in the private rented sector increased from 24% in 2005-06 to 46% in 2015-16. Over the same period, there was a corresponding decrease in the proportion of people in this age group in both the owner occupied (from 56% in 2005-06 to 38% in 2015-16) and social rented (from 20% in 2005-06 to 16% in 2015-16) sectors.

There has been a large increase in the number of families in the private rented sector, particularly lone parent families.

The proportion of households living in the private rented sector who had dependent children increased from 30% in 2005-06 to 36% in 2015-16. Given the growth of the private rented sector over this period, this equates to about one million more households with dependent children in the private rented sector.

This increase was particularly apparent for lone parents with dependent children. Between 2005-06 and 2015-16, the proportion of households in the private rented sector that were lone parents with dependent children increased from 9% to 11%. An increase from around 229,000 households to 519,000 households. There was a corresponding decrease in such households in social rented sector.

One in five private renters are dissatisfied with their status as a private renter.

In 2015-16, 21% of private renters were dissatisfied with their status as private renters (9% of whom were very dissatisfied with their current status), compared with 10% of social renters and less than 1% of owner occupiers.

Private renters spend a significantly greater proportion of their household income on their housing costs than social renters, but are less likely to be in arrears.

On average, households in the private rented sector spent 35% (including Housing Benefit) of their income on rent. Social renters spend, on average, 28%.

Some 9% of private renters were either currently in arrears or had been in the previous 12 months, compared with 25% of social renters.

Churn in the private rented sector is higher than in other sectors.

In 2015-16, 787,000 households moved within the private rented sector (i.e. from one privately rented home to another) and 196,000 new households were created. There were 187,000 moves into the sector, of which 72%, (135,000) were from owner occupation. There were 256,000 moves out of the sector, with 67% (172,000) of these moving to owner occupied accommodation and 84,000 moving into the social rented sector.

Most private renters move because they want to but one in ten was asked to leave by their landlord.

When asked about their most recent move, most private renters said that their last tenancy ended, because they wanted it to (73%). A tenth (11%) said that their landlord or agent ended the tenancy.

Among those private renters who had moved in the last three years because their landlord had asked them to, roughly two thirds (63%) were asked to leave because the landlord wanted to use or sell the property.

While the energy efficiency and quality of the private rented sector has improved, standards lag behind the social rented sector.

In 2015, the average SAP rating among private rented homes was 60. This average rating was similar to owner occupied homes, although the distribution of EER bands varied. Overall the private rented stock was less energy efficient than the social rented stock which had an average SAP rating of 67. This difference is partly explained by the private rented sector having an ‘older’ housing stock which is generally less well insulated.

Over a quarter (28%) of private rented homes failed to meet the Decent Homes standard in 2015. The comparative figure for social sector rented sector was 13%. Although the private rented sector has always performed less well than other tenures using this measure of housing quality, there was a marked improvement in the proportion of non-decent private rented homes over the 2006 to 2013 period from 47% to 30%. Since then the proportion of non-decent homes in the sector has remained virtually unchanged.”

Comments

Dr Rosalind Beck

2 weeks ago

Thanks, Neil, for the summary.

A few quick points before I go out, just based on the summary:

1. I think there is a methodological problem when tenants are asked why they had to leave a property - it is possible that quite a few would not admit even in a survey that it was because they had damaged the house, were in arrears and so on - people may doubt the anonymity of the research and/or have even convinced themselves that it was not their fault they were asked to leave. Also, the more rogue tenants are less likely to fill in surveys I would think so the sample could be skewed. When landlords are asked, the results come out quite differently and in the majority of cases, unlike in this research, it is not about them needing to sell the house but more about arrears and damage.

2. They have made the same mistakes as they always make when comparing what private renters, social renters (and owner-occupiers) pay on their rent. For example, they have not mentioned (or maybe have in the report - I will check) that private landlords have to pay tax on the profit from the rent whereas social landlords don't have to, so the latter are in effect subsidised. When they compare owner-occupiers they always leave out the issue of the costs of maintenance, insurance and so on that are included within the private rent collected.

3. They mention that many private renters are unhappy with their status as renters. Well that's just obvious. Everyone would prefer to be an owner-occupier - but not everyone has the means or wants to make the effort to put themselves in that position. I might have a car on Hired Purchase, but prefer to own it outright. I might not want to go without my nights out, my mobile, my Sky package and my holidays etc. though, to achieve this. I don't know what the real point is of including this in the survey on its own - again, maybe the rationale is in the report (not got time to read it yet!).

4. Regarding proportion of income spent on rent, they should always treat London and the rest of the country separately, because of the unique situation in London which skews the figures.

I will look at the report later and see if anything else occurs to me.

I skimmed through the summary above, but what stood out to me was 28% of income is spent on rent by social tenants and private pay 35% of income on rent. Given social landlords (as in housing associations) do not have to pay ANY tax cuz they are a charity. leave morgaged landlords aside a moment, that means they are only 7% cheaper and given rates of tax of 20-45 (and hidden band of 60%) and other hands outs social get. I would say they are more expensive by a country mile compared with private. No where a national audit report found this year since 2006 ouside london social landlords rents have increased faster than private.

Dr Rosalind Beck

2 weeks ago

Does anyone know if a similar survey is done on the social rented sector and if so, where I can find it?

Dr Rosalind Beck

2 weeks ago

Reply to the comment left by "Appalled Landlord" at "14/07/2017 - 17:19":

Thanks AL.

H B

2 weeks ago

Reply to the comment left by "Tobias Nightingale" at "14/07/2017 - 16:28":

Hi Tobias,

I don't think you are quite correct there because social rents tend to be cheaper and the residents by definition poorer.

Let's say the social rent is £130 p/w then the tenant's income might be c. £500 p/w.

The equivalent rent in the PRS might be £250 p/w and therefore the tenant's income about £700 p/w.

So in this case the private rent is not 7% higher but nearly 100% higher.

And of course social rents never exceed a certain level, but private rents can be much higher, especially in the SE.

The detailed report on the PRS states, on page 16
“2.15 In 2015-16, around a quarter (24%) of private renters received Housing Benefit. This equates to about 1.1 million households, including 240,000 (5%) who had their full rent covered by Housing benefit. Over half (59%) were receiving Housing Benefit at the start of their tenancy, Annex Table 2.2.”

This survey was carried out between April 2015 and March 2016. Since then landlords have started to increase rents or sell properties because of S 24, evicting benefit recipients in the process. The potential increase in homelessness, and in the cost of temporary accommodation for them is much bigger than I imagined.

The anti-landlord brigade often claim that Housing Benefit is a subsidy to landlords. Next time you see such a comment you can refer them to the glossary on page 39 where the government confirms that it is in fact a subsidy to the tenant:

“Housing Benefit: A benefit that is administered by local authorities, which is designed to assist people who rent their homes and have difficulty meeting their housing costs. Council tenants on Housing Benefit receive a rent rebate which means that their rent due is reduced by the amount of that rebate. Private and social housing tenants usually receive Housing Benefit (or rent allowance) personally, although sometimes it is paid direct to the landlord.”
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/627686/Private_rented_sector_report_2015-16.pdf

Reply to the comment left by "H B" at "14/07/2017 - 19:30":

Hi H B

Eight different sub-reports are available from https://www.gov.uk/government/collections/english-housing-survey#2015-to-2016

One of them deals with “Housing costs and affordability, 2015-16”
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/627683/Housing_Cost_and_Affordability_Report_2015-16.pdf

Chapter 1 on page 6 has the title Housing costs
1.1 The Household Reference Person (HRP)is the person in whose name the dwelling is owned or rented or who is otherwise responsible for the accommodation.

Overview of mortgage and rent
1.2 In 2015-16, the average (mean) weekly mortgage payment of £159 was
lower than the average weekly rent for private renters (£184). The average
weekly rent for social renters was also lower at £106 for housing association
renters and £95 for local authority renters, Annex Table 1.1.

1.3 Housing costs were higher in London across all tenures. For private renters, the average weekly rent in London was £300 per week, almost twice the average outside London (£153), Figure 1.1.

1.4 Smaller differences between London (£129) and outside London (£95) were
observed in average weekly rents in the social rented sector. The average
weekly cost of renting from a housing association in London was £139.

Chapter 2 on page 12 covers Income

2.2 Four measures of income are explored within this section. The two main
measures are HRP and partner income and all household income. In this
chapter, neither measure includes Housing Benefit.

Weekly income
2.4 Households with a mortgage had the highest average (mean) weekly HRP
and partner income (£1,071 compared with £682 for outright owners and £602
for private renters). Average weekly income was lowest among social renters
(£349). Households renting from a housing association (£360) had a higher
average weekly income compared with households renting from a local
authority (£334), Figure 2.1.”

Chapter 3 starting on page 16 has the title Affordability. This is analysed in a number of ways, as follows.

Tenure
3.4 Using all household income, on average, rent payments were 28% of household income for social renters and 35% of household income for private renters. Excluding Housing Benefit, the average proportion of income spent on rent was 37% for social renters and 41% for private renters, Figure 3.1.

Region
3.6 As shown in Chapters 1 and 2, housing costs and incomes were higher in London than outside London. The proportion of income spent on housing costs was higher in the capital than outside it.
3.7 This was especially notable for private renters. Using all household income, private renters in London spent 45% of their income on rent compared with 32% outside London. Excluding Housing Benefit, the proportion rose to 54% in London and 38% outside London, Annex Table 3.2.
3.9 Social renters in London spent 32% of their household income on rent payments compared with 27% outside London. Excluding Housing Benefit, the proportions increased to 43% for London and 36% for outside London, Annex Table 3.3.

Age
3.13 Among social renters, those aged 35-44 spent, on average, the lowest proportion of their income on their rent (26%). Those aged 65 and over spent the most (30%). Excluding Housing Benefit, these proportions increased to 32% and 39% respectively, Annex Table 3.3.
3.14 In the private rented sector, the proportion of household income spent on rent was lowest for those aged 35-44 (29%) and highest for those aged 16-34 (38%). Excluding Housing Benefit, those aged 65 and over spend the largest proportion of their income on housing costs (45%); those aged 35-44 spend the lowest (34%), Annex Table 3.2.

Household type
3.21 Another difference between private and social renters was among all households with dependent children. On average, the proportion of HRP and partner income spent on rent by private renters with dependent children was higher (34% with Housing Benefit or 41% without Housing Benefit) compared with social renters with dependent children (25% of HRP or partner income with Housing Benefit or 31% without Housing Benefit).

There is also a sub-report on Future home owners
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/627151/Future_home_owners_full_report.pdf

Main findings (edited down for relevance to the PRS)

59% of private renters expected to buy at some point in the future (2.6 million households), unchanged from 2014-15.

The proportion of private renters who said affordability was the main barrier [to home ownership] increased from 56% in 2008-09 to 70% in 2015-16.

31% of private renters expected to continue to rent in the private rented sector in the long term.

52% of all private renters expected to be owner occupiers in the long term.

Chapter 1 Profile of future home owners

1.1 As part of the household interview, all renters were asked whether they expected to eventually buy a home or share of a home in the UK at some point in the future, followed by follow-up questions as to how far in the future they were planning to do so. This chapter presents the demographic and economic characteristics of renting households who expect to buy their own home at some point in the future.

Future buying expectations
1.3 Of private renters, 59% expected to buy at some point in the future (2.6 million households).

Reasons for not expecting to buy [Social and private renters]
1.41 Those renters who did not expect to buy their own home in the future were asked why this was the case. They could provide more than one answer to this question. In 2015-16, by far the most common reason among all renters for not expecting to buy was perceived affordability.
1.42 Of all renters who did not expect to buy, 74% gave ‘it is unlikely I will ever be able to afford it’ as their main reason. A further 14% said they do not have a sufficiently secure job, and 12% said they would not like to be in debt. In addition, 10% felt that repairs and maintenance would be too costly, Annex table 1.28.
1.43 However, some 37% also gave ‘positive’ reasons for not expecting to buy – 9% preferred the flexibility of renting, 18% said ‘I like it where I am’ (the second most common reason overall) and another 10% said they would not like the commitment of buying.
1.45 The proportion of renters who gave ‘positive’ main reasons for not expecting to buy was 18%; 3% preferred the flexibility of renting, 10% said ‘I like it where I am’ and 5% said they would not like the commitment of buying. Social and private renters had similar main reasons for not expecting to buy, Figure 1.4.

Chapter 2 Planned future tenure

2.1 In addition to asking renters whether or not they expected to eventually buy a home in the UK, respondents are also asked about the tenure they expect to live in in the longer term. This question is asked of people in all tenures, and includes a range of tenure options.
2.2 Among renters, social renters were more likely to expect to remain in their current tenure: 75% of social renters expected to continue to rent in the social sector in the long term, compared with 31% of private renters expecting to remain in the private rented sector, Annex Table 2.1.
2.3 Private renters were more likely to expect to move into home ownership than social renters. In 2015-16, 52% of all private renters expected to be owner occupiers in the long term, compared with 21% of all social renters, Figure 2.1.

Disability and long term illness
2.14 In 2015-16, 60% of privately renting households in which the HRP or their partner was registered disabled expected to remain private renters in the long term, compared with 29% of those households where the HRP or partner was not registered disabled.

Geography
2.16 There was no difference in the proportion of private renters in London who expected to buy in the long term, compared with those in the rest of England. However, [only] 24% of private renters in London expected to remain private renters, compared with a third of those in the rest of England.

Economic status
2.17 Differences in expected tenure across different economic activity groups suggest that other factors, such as tenure, age, household composition, income and health influence households’ future expectations alongside their economic activity. For example, 40% of HRPs in the social rented sector who were employed full-time expected to own their own home in the long term, compared with 63% of HRPs in the private rented sector who were employed full-time, Annex Table 2.7.
2.18 Similarly, 55% of social renters employed full-time expected to remain social renters in the longer term, whereas a quarter of private renters working fulltime expected to remain private renters in the long term. Just over a quarter (26%) of social renters in part-time work expected to own in the long term, compared with 42% of private renters in part-time work.

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