One of the most representative and wide-ranging studies of the English housing market – including the private rented sector – is the English Housing Survey, whose most recent incarnation was for 2019-20, a year heavily impacted by the ongoing Covid-19 pandemic.
The English Housing Survey (EHS) is a national survey of people’s housing circumstances and the condition and energy efficiency of housing in England, and is one of the longest-standing government surveys. The very first was back in 1967, so there is a significant amount of data to compare against.
In December 2020, the Ministry of Housing, Communities & Local Government – the department responsible for putting together the survey – released its headline report, which has been followed up in recent weeks with a series of more detailed topic reports.
Here, we take a look at the findings from one of the best annual datasets we have at our disposal.
Almost a fifth of homes
The number of households in the private rented sector has decreased since 2016-17, but did not change between 2018-19 and 2019-20, the EHS found.
In 2019-20, the private rented sector accounted for 4.4 million (or 19% of households) in England, unchanged from 2018-19, but ever so slightly lower than in 2016-17 (20%).
This is primarily explained, the report says, by a decrease in the proportion of households in the private rented sector outside of London from its peak of 19% in 2016-17 to 17% in 2019-20 – which may have in part been due to the pandemic and many young professionals and students returning to their family homes during lockdowns.
Renting is at its most prevalent in London, with 28% of households living in the private rented sector in 2019-20.
Overcrowding is also an increasing issue in the PRS, albeit still a low-level problem. In 2019-20, 7% of private renters lived in overcrowded accommodation, up from 6% in 2017-18 and its highest level since 1995-96, when data collection first began.
The survey also found a lower level of non-decent homes in the social sector than in the private rented and owner-occupied sectors. In 2019, some 12% of dwellings in the social rented sector failed to meet the Decent Homes Standard, lower than the proportion of private rented (23%) and owner-occupied (16%) homes.
Positively, in 2019, only 10% of the housing stock had a HHSRS Category 1 hazard, a significant fall from 21% in 2009. That said, such hazards remain more prevalent in the private rented sector (13%) than the owner-occupied (10%) or social rented sectors (5%).
Although the private rented sector had the highest proportion of homes with a Category 1 hazard, there was a notable drop in the proportion of stock with such hazards, down from 28% in 2009 to 13% in 2019.
Alongside this, the energy efficiency of the English housing stock has continued to improve, with the average SAP rating of English dwellings standing at 65 points in 2019, up from 63 points in 2018. This was evident in all tenures.
The social housing sector remains more energy efficient than the private sector, with the vast majority of dwellings (61%) in EER bands A to C, compared with 38% of private rented sector dwellings and 36% of owner-occupied homes.
A thorough breakdown
In July, MHCLG released a more detailed report on the private rented sector, setting out the survey’s findings on the lettings market in England in a clearer fashion.
It found that a higher proportion of private renters (32%) spend a higher amount of their household income on rent than social renters, with the ratio of household income to rent unsurprisingly at its highest in London – where renting is at its most expensive.
The research also showed that younger renters are much more likely than older private renters to expect to own their home in the future – as high as 78% for 16-24-year-olds and as low as 12% for 65-74-year-olds.
What’s more, private renters in the oldest and youngest age categories are less likely to have difficulty with rent payments than those in the middle age categories.
Promisingly, the majority of private renters (83%) were satisfied with their current accommodation, a higher proportion than social renters (78%), but less likely than owners (95%). Levels of satisfaction did vary by region, from 80% in the North West to 86% in the North East, but still consistently above 80%.
However, private renters were the least likely to be satisfied with their tenure: 70% of private renters were satisfied with their tenure, compared with 80% of social renters and 98% of owners.
Satisfaction with tenure was highest in the North East (83%) and lowest in the South East (64%), with relatively low levels of satisfaction also reported in London (66%), the South West (66%) and East Midlands (66%).
In terms of the local area, the findings showed that the majority of private renters (84%) were satisfied with where they lived, but this varied quite a lot by region – from only 77% in the North West to as high as 92% in the East of England.
Private renters were also more likely (75%) to be satisfied with repairs and maintenance than social renters (66%), according to the EHS. The three main reasons for dissatisfaction with repairs and maintenance among private renters were: the landlord not bothering about repairs or maintenance (35%), the landlord being slow to get things done (25%) or the landlord doing the bare minimum (15%).
When it comes to complaints, 2019-20 saw 15% of private renters – approximately 683,000 private rented households – consider making a complaint to their landlord or letting agent. Of those who considered making a complaint, some 43% made a complaint to the landlord, and 40% complained to their letting agent, while a further 22% did not end up making their complaint.
Less than half (45%) of private renters who had made a complaint were happy with the response to their complaint, with 26% happy with all of the response and 19% with some of the response, but over half (55%) not happy with the response.
Rent arrears are relatively low
Despite the pandemic causing enormous issues for the economy and jobs, rental arrears in the PRS remained reassuringly low during 2019-20.
Approximately 8% of private renters reported that they had been in rent arrears over the past year, with 3% currently in arrears and 5% saying they had been in arrears in the past 12 months.
Private renters were less likely than social renters to have had any arrears in the past year (8% of private renters versus a much larger 23% of social renters).
Again, private renters in London were most likely to report any arrears in the past year (11%), with arrears in other areas ranging from 4% in the East of England to 9% in the South East.
As you would expect, arrears were at their highest among unemployed private renters (23%, compared with 14% or lower for other employment groups). Around 10% of this group – 11,000 households - were currently in arrears, the report found.
The survey also revealed that households with single adults – lone parents, one-person households, and lone sharers – were more likely than households with couples to have had rent arrears in the past year.
Lone parents with dependent children (13%) were around two times as likely as couples with dependent children (6%) to have rent arrears, and one-person households (8%) were more likely than couples with no children (3%). Additionally, it found that lone persons sharing with others (12%) also had a relatively high likelihood of arrears, as did lone parents with non-dependent children.
Meanwhile, nearly three quarters (73%) of private renters found it easy to afford their rent each month, with those finding it difficult most likely to come from lower-income households.
The EHS found that private renters had lived, on average, in their accommodation for 4.3 years, with the length of time in their current accommodation being considerably shorter than for social renters (12.2 years) or owner-occupiers (17.4 years).
More than half (53%) of private renters had lived in their current accommodation for two years or less, and private renters were more likely than other tenures to have lived in their existing home for this length of time. This speaks to the more transient, flexible nature of renting, which sees people move around more frequently than in other housing sectors.
The average length of residence also depends on age, with older private renters far more likely to stay put for longer. It shifts from a mean of 1.3 years for private renters aged 16 to 24 to 5.7 years for those aged 45 to 64 and 17.5 years for private renters aged 75 and over.
Although time in current accommodation was relatively short for many renters, time in tenure appeared longer, indicating that private renters were moving home within the private rented sector – promising news for landlords concerned about demand levels.
The research found that most private renters had rented from private landlords for a continuous period of three years or more: some 18% had been private renters for three to four years, 24% for five to nine years and 30% for ten years or more.
There is plenty more in the report that we can’t do justice to here, but it’s well worth reading for the full context.
We can undoubtedly glean some interesting take-homes from the findings, including the improved energy efficiency of the PRS and the fact that most tenants are happy with their rental experience in general. However, there are many challenges too that still need to be addressed.