A key change in the UK’s housing market over the past twenty years has been the growth of the private rented sector (PRS), with more living in the sector than ever before. This growth has led to the view that there is now a ‘generation rent’ who are priced out of home ownership and stranded in insecure short-term lets for prolonged periods of their lives – fuelling concerns about intergenerational inequality.
At a recent seminar, hosted by the Public Services and Governance research group at the University of Stirling, Dr Kim McKee, a co-investigator for The UK Collaborative Centre for Housing Research (CaCHE), presented the key findings from her research on ‘generation rent’ and precarity in the contemporary housing market.
Who are ‘generation rent’?
The UK 2011 Census highlighted that 40% of private renters were young people under the age of 35. With a challenging labour market, rising student debt and welfare reforms, home ownership and social housing is increasingly out of reach for these young people, who end up stuck private renting for much longer than the previous generation.
It was noted by Dr McKee that there is a clear age dimension to the recent shifts in housing tenure, but that the ‘generation rent’ label is more complex than portrayed. Income and family support were emphasised as just as critical in the understanding of young people’s experiences and future plans, as was geography.
Indeed, other research has highlighted that income and family background have a huge impact on young people’s housing market experiences. The Resolution Foundation’s recent report highlights that young people from wealthier families are more likely to become homeowners, suggesting that there are also intra-generational inequalities.
Dr McKee’s study focused on the inequalities facing these young people through qualitative research with 16 young people aged 35 and under living in the PRS in Scotland or England. Those on low incomes were explicitly targeted with the aim of giving them a voice, which was considered to be largely absent in previous research.
Aspirations vs expectations
There was a long-term aspiration for home ownership among the majority of participants, with a smaller number aspiring to social housing. But private renting was seen as the only short-term option as a host of challenges thwart them from realising their ambitions:
- mortgage finance
- family support
- labour markets
- student debt
- welfare reform
The fact that housing tenure was highlighted by respondents rather than housing type or location, as previous research has highlighted, suggests there is a general dissatisfaction with living in the PRS. Indeed, it was noted that the PRS was discussed largely negatively, perceived as the ‘tenure of last resort’.
Despite the continued aspirations for home ownership, there was a marked difference between aspirations and expectations. There was a levelling down of expectations to own and a gap emerging between what the young people aspired to as their ideal and what they expected to achieve. A small minority even remarked that a more realistic goal may in fact be improvements in the PRS. The study showed that such expectations were due, mainly, to low earnings and insecure employment, combined with a lack of family financial support.
While the short-term nature of private renting makes it a very flexible rental option, it also makes it insecure and precarious, creating barriers for tenants who want to settle into a home and community. This is particularly worrying for families with children, who can be greatly affected by the upheaval of having to regularly move.
The study was particularly interested in the more intangible and emotional impacts on ‘generation rent’ and how the frustrations in realising their aspirations impacted negatively on their wellbeing.
It was stressed that issues in the PRS are having serious negative impacts on the wellbeing of young people – insecure, expensive and poor quality housing are contributing to depression, stress and anxiety. Moreover, for those on the lowest incomes, such issues are even contributing to homelessness.
Not only is mental wellbeing affected but their physical health has also been impacted by poor quality housing. Problems with rodents, damp and mould, broken white goods and poor quality accommodation in general were all reported by participants.
The experiences of the young people in the study were described as a “sad reflection of housing in the UK today” and raises questions over whether the PRS can really meet the needs of low income groups in particular.
Another key finding was that where people live really matters, not only because of the spatial nature of housing and labour markets, but also as tenancy rights and regulations vary across the UK.
Recent reforms in Scotland have provided tenants with greater security of tenure and more predictable rent increases. England was highlighted as lagging behind the rest of the UK in terms of regulation and tenants’ rights as it lacks any national landlord registration scheme. Letting agent fees in England were also highlighted as a real issue in relation to affordability.
It was suggested that the rest of the UK could learn much from the Scottish experience, although there is a need to go further, particularly in relation to affordability.
A key message from the study was that security of tenure really matters for those living in the PRS but reform of the housing system can only go so far. Participants identified more affordable housing, more protection for renters and income inequalities as areas where the government could intervene to improve things.
Based on the findings, six key policy recommendations were made:
- ensure security of tenure;
- take action on rents;
- provide better education for tenants on their rights, and indeed for landlords;
- provide more affordable housing; and
- ensure greater understanding of intra-generational inequalities.
If the wider inequalities within society are also addressed, perhaps the PRS could become an aspiration rather than the ‘tenure of last resort’.
If you enjoyed reading this, you may also be interested in our previous posts on build to rent and meeting demand and improving data in the private rented sector.
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