Housing Studies Association conference paper

Assessing the growth of the private rented sector: choice versus constraints

Paul Sissons and Donald Houston

16th April 2014

Outline

• Aims and research questions

• The scale of growth in the PRS

• Perspectives on PRS growth

• Tenure transitions

• A changing PRS?

• Tenant satisfaction in the PRS

• Next steps

Research questions

Significant growth of the PRS raises a number of questions about the drivers of growth, experiences of the tenure and policy for the sector. Our focus includes:

• How have the characteristics of tenants in the sector changed?

• How have tenants’ experiences of the sector changed?

• Does the growth of the sector appear to be driven by choice or constraint?

A growing private rented sector

Source: Office for National Statistics reporting of Labour Force Survey 1980-2008; English Housing Survey 2008-9 onwards

Characteristics of the PRS

• PRS plays a number of different roles:

• Relatively affordable

• Immediate access

• Rent/partial rent covered by state benefit for tenants on low income

• Facilitates spatial mobility

• People: Students; Mobile workers; Aspiring homeowners; Older people

• Places: Cities; Remoter rural districts

Perspectives on PRS growth in 1990s

• 1991-2001 PRS growth in…

• Districts: Cities; Mining & Manufacturing

• Regions: Northwest; West Midlands; Wales

• Economic position: Permanently sick; Students

• Household types: Lone parents; Multifamily households

• Cities, south and east:

• Substituting for homeownership

• Mobile workers and students

• Less prosperous districts

• Substituting for social renting

• Economically inactive

The geography of the PRS: I

The geography of the PRS: II

Flows out of the PRS by destination: 1991-2008

(Source: Tenure moves - three-year rolling average from BHPS. House prices - ONS reporting of Regulated Mortgage Survey. Adjusted using RPI)

Characteristics of PRS growth: 1991-2008

Characteristics of PRS – age: 1991-2008

Characteristics of PRS – household type: 1991-2008

Characteristics of PRS – finances: 1991-2008

Characteristics of PRS – satisfaction: 1991-2008

Emerging Findings and Conclusions

• Rapid growth in the PRS – now larger than the social rented sector

• Flows from PRS- SRS decline consistently since the early 1990s

• Flows to owner-occupation decline from circa 2000 onwards

• Characteristics of growth in the PRS from 2001-2008 appears less distinct than that observed in the 1990s.

• The profile is less disadvantaged and most of the growth is among those in employment

• But tenants are on average getting older

• Some evidence suggests dilution of dominant tenure role in facilitating labour mobility

• Satisfaction rising; financial stress falling; move aspiration falling

• Change from short to longer-term tenure?

Next steps – exploring choice/constraint

• Extension to post-recession (Understanding Society)

• Comparison of short versus long-term renters

• Examine the role of geography/area type post-2001

• Modelling of tenure choice:

• How are inherent tenure preferences changing over time?

• Does the PRS comprise two (or more) segments within it?

Thank you

References

• Ferrari, E. (2014) The Social Value of Housing in Straitened Times: the View from England. Housing Studies, in press.

• Houston, D. and Sissons, P. (2011) The Changing Geography of Privately Rented Housing in England and Wales. Urban Studies, 49(4), p.795-819.

• Hulse, K., Jones, C. and Pawson, H. (2010) Tenurial ‘competition’, tenure dynamics and the private rented sector: an international reappraisal. Journal of European Real Estate Research, 3(2), p.138-156.

• Kemp, P.A. (2011) Low-income tenants in the Private Rental Housing Market. Housing Studies, 26(7-8), p.1019-1034.