Landlords provide homes for one in five of the population
Private landlords provide homes for a fifth of the UK’s population and nearly 2 million families with children, the English Housing Survey has found.
The latest figures show that the private rented sector, which has more than doubled in size since 2002, remains larger than the social rented sector, accounts for 4.7 million households, and is now the most prevalent tenure in London.
The survey, which also shows that the sector is increasingly relied upon to house families and older households, has sparked calls for private landlords to receive more support.
Residential Landlords Association (RLA) policy director, David Smith, said: “These findings reiterate the importance of the private rented sector for families across the country.
“Larger than the social sector, and housing more families with children, the private rented sector provides much needed housing for nearly five million people.
“The Government needs to recognise its vital role in the housing market and implement pro- growth tax and planning policies to support the majority of landlords who are individuals to meet ever growing demand for rented housing.”
The English Housing Survey 2016-17 was published on January 25, and provides some key insights into how the private rented sector is changing.
The number of families with children in private rented housing increased by nearly a million to represent 38 per cent of all households in the sector over the last ten years.
This compares to 35 per cent in social housing. The proportion of those aged 35-44 has also substantially increased over this period to over a quarter.
The PRS is also now the most prevalent tenure in London, with 30 per cent of households now privately renting.
In contrast, 25 per cent of households owned their property outright, and 22 per cent bought their home with a mortgage.
This is a divergence with households outside of London, where outright ownership was most prevalent (36 per cent of households), followed by buying with a mortgage (30 per cent) and then private renting (19 per cent).
A spokesman for the RLA said: “These findings show the changing housing landscape for households across the country, but suggest that a one-size fits all approach to policy-making for the private rented sector is undesirable.
“While experiences of renting in the capital may receive wide-spread media coverage, with high demand for properties, creating national policies based on these experiences may negatively impact other PRS markets across the country.”
The latest English Housing Survey reports that the average length of tenure in the private rented sector has remained unchanged from the previous years, and stands at 3.9 years.
Social renters and owner-occupiers reported they had lived in their property for longer.
“This is not surprising given the flexibility the private rented sector provides, and the number of different markets that the PRS encompasses,” said the RLA spokesman.
“For example, the Student market, where it is expected there will be a shorter amount of time spent in properties, or where professionals are moving to a new city and looking for a short-term home.”
More than half (51 per cent) of tenants reported they had been in their privately rented home for over five years – demonstrating that most private tenants can secure a long-term home if they wish.
“Therefore, policy suggestions for mandatory long-term contracts for all tenants would be inappropriate, rather, removing barriers that prevent longer-term tenancies for those who desire them would be desirable,” said the RLA.
“Such as encouragement for lenders and insurers to change their policies on restricting the length of ASTs, tax-relief for longer term tenancies, and a new housing-court with a reformed section 8 process.”
Just over two thirds (68 per cent) of households in the private rented sector had a householder aged under 45 years.
While households aged 25-34 are more likely to be renting privately than buying their own home, there has also been a considerable increase in the proportion of 35-44 years olds in the private rented sector - making it the second most prevalent tenure behind owner occupation.
At the same time, the number of households with dependent children in the private rented sector has increased by about 966,00 between 2005-07 and 2016-17.
The RLA said: “These findings show that the private rented sector is not just a source of homes for young people but people of all ages, and increasingly important for families.”
Three quarters (74 per cent) of private renters were working, with 63 per cent in full-time employment and 11 per cent in part-time employment. At the same time, 9 per cent of private renters were retired, 6 per cent were in full-time education, and 4 per cent were unemployed.
The report said: “While the overall rate of owner occupation has not changed in recent years, the composition of the group has: there are more outright owners, while the proportion of those buying with a mortgage is down.
“The increase in the number and proportion of outright owners is at least partly explained by population ageing, with large numbers of baby boomers reaching retirement age, paying off their mortgages and moving into outright ownership.”
The key role played by the PRS in housing the ageing population is becoming more apparent with now 9 per cent of renters being retired.
The RLA believes this is ‘an important policy issue that needs due consideration’ as the trend is likely to ‘keep rising and landlords in the future may be asked to install adaptations to properties to accommodate the needs of the tenant, or this may spark greater development of purpose built retirement accommodation that has been adapted.’
Rent arrears were found to be more prevalent in the social rented sector over the private rented sector.
In 2016-17, 25 per cent of social renters were currently in arrears or had been in the last 12 months (around 682,000 households), whereas, 9 per cent of private renters were either in arrears or had been in the last 12 months (around 392,000 households).
This has remained relatively unchanged since 2011-12.