The private rented sector: meeting demand and improving data

The private rented sector (PRS) has grown recently, to become a more than significant part of the housing market in the UK. A shortfall in social housing availability, and extortionate deposit costs for first time buyers has meant that demand in the private sector has grown exponentially since the 1990s, the sector now taking in clients from across the demographic spectrum.

But research has shown the demand for private rent housing is not just about finance. Increasingly, many young professionals actively choose to live in the private rented sector because they like the flexibility and locational benefits of private rents. Renting privately can mean they are able to move freely for jobs without being constrained by a mortgage, and live in city centre locations, with short commutes and close proximity to amenities like shops, restaurants, gyms and cinemas.

Despite the growing “young professional” market, the sector also (in some areas) has something of an image problem. Characterised by rogue landlords charging extortionate rents for poor quality homes, with the ability to remove tenants without reason or much notice. This negative aspect, which centres on the issue of tenant rights and security within the private sector, is something which has been discussed widely at a number of events recently, for example, at the UK Collaborative Centre for Housing Evidence (CaCHE) event we attended in Glasgow last month. It is also something which last year the Scottish Government legislated to try and mitigate.

Ensuring quality in a place people can call home

One of the other major issues that is often highlighted with PRS is the need for a minimum quality standard, bringing private lets into line with the minimum standards (supposedly) adhered to in social housing. The legislation and policing of this element of the PRS is proving more complicated to navigate, although it is something which is being discussed within the Scottish Government.

There is also the growing issue of the short-term rented sector. You cannot have failed to notice, whether you work in housing or not, the rise of sites like AirBnB and HomeAway which allow individuals to list entire properties or spare rooms out on a short-term basis. Concerns as to the growth of this market have been raised the world over. The major issues are the impact on permanent residents, who can find having new neighbours each week disconcerting, and on the local housing market more generally, as the rise of short term lets then reduces the pool available for longer term private lets. Cities like Barcelona are, however, beginning to look at how regulation and use of permits can address the negative impacts, and are being watched the world over to see if their actions will work.

How can we meet demand?

It is often said that housing is a complex flux of different sub-sectors, and that, more often than not, one cannot function effectively without the other. The PRS, the housing market and social housing are all reliant on each other to help control demand and prices and ensure that everyone, regardless of circumstance, has somewhere that they can call home.

One of the major issues with meeting demand is space and land to build; another is funding and another is understanding exactly who needs homes, and what type of homes they need. In many cases people view the private rented sector as being a stop gap for those not able to get social housing, and not able to afford a deposit for a mortgage. Although in many instances they may be right, the demographic of those renting privately now is changing, and becoming more and more varied year on year, with many young professionals and families with children now renting privately.

Understanding these trends will be key to meeting demand. In order to do this the data on housing, particularly within the private rented sector needs to improve. Research from the Urban Big Data Centre and CaCHE found that data is lacking, and that we need to improve it if we are to improve the PRS more generally.

A recent evaluation by the Welsh Government of Rent Smart Wales found that Rent Smart Wales and its database of registered landlords has provided good quality information and guidance to local authorities and landlords, as well as driving up standards within the PRS in Wales. Learning from how data collected on the Rent Smart Wales database can be maximised to provide an accessible source of information on the PRS in Wales is very important going forward, and this is something we are seeing increasingly across the sector – the desire for more data, to help those within the sector make better decisions.

What next?

A report released by LSE in June 2018 found that while the PRS has grown significantly, projections suggest that it will start to level out, and reach a state of stasis, or even decline in the coming years. Other reports have contradicted this, however, stating that unless there is an intervention or significant change in house prices, more people than ever will be forced to live within the PRS.

What does seem to be agreed upon is that better data and understanding of the sector and how to manage it is necessary and that ultimately, standards will improve across the board, with or without government intervention, but the way we view private rented sector accommodation will also change.

PRS properties will not only be buy-to-let houses, converted into HMOs, or tiny bedsits where 5 people share 2 rooms. Instead the market for sectors like build-to-rent are growing, and changing the expectations of the new generation of renters about what to expect from PRS accommodation.

In the future the ambition is for high quality, stability and housing which is suitable for a range of different tenants and their needs from young professionals and families with children, right through to older people living in retirement villages managed by a corporate landlord. It is hoped this will help stabilise rents and improve standards across the board, creating affordable places that people can plan to live in long term, with security and quality at their heart.


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More people, more houses, more dissatisfaction… Are we ready for higher-density living in the UK?

abstract windows in flats (Unsplash)

By Morwen Johnson

We shape our dwellings, and afterwards our dwellings shape us (Winston Churchill)

It’s estimated that we need 240,000 to 245,000 additional homes each year in order to meet housing demand and need in England. Statistics show that we are consistently failing to meet this level of housebuilding but how we change this situation is a matter of debate. The UK Government’s recent Productivity Plan included proposals to make development on brownfield land easier as well as freeing up public sector land assets and supporting higher density housing around commuter transport hubs. Others are recommending more controversial solutions, such as increasing building within the green belt (for example see reports from London First and the Adam Smith Institute).

It seems inevitable that the future requires housing at greater density but, particularly in London, alarm is now being sounded about superdensity and potential hyperdensity developments, which have become the norm in many global cities.

What is high density development?

From a planning point of view, density is intrinsically linked with creating viable communities which have a population to make amenities and infrastructure sustainable and cost-effective. Higher density designs (in urban environments) also increase the amount of street activity and thus, the perceived safety and attractiveness of a place.

Appropriate density is of course relative to context, and guidance such as the London Plan density matrix reflects this. Although there is no hard and fast definition, within urban areas a general density of around 70 to 100 dwellings per hectare (dph) level is common. In terms of new developments in major city centres like London, superdensity has been used to describe densities over 150 dph (or 450-500 habitable rooms). Hyperdensity can mean 350 dph or more.

Higher-density living does not necessarily mean high rise buildings though – careful design can increase neighbourhood density via mixed-tenure mid-rise developments. A group of four London-based architectural practices recently published a report Superdensity which aimed to provide positive guidance on how to ‘combine ambitious densities with popular and familiar urban forms’.

Space as a luxury or a necessity

While this may at first sight appear to be a debate about the planning system, it actually raises more fundamental questions about the aspirations and expectations we have for how we live.

There is a legacy in Britain of thinking that high-density housing means tower blocks in undesirable areas. Much urban regeneration in recent years has focused on replacing high-rise buildings. Lower-rise developments can also be high-density, if well designed, so the issue is actually often about housing quality rather than increased density, and whether the housebuilding industry is delivering the types of housing that people want.

RIBA’s Future Homes Commission highlighted that a focus on number of bedrooms ignores the potential of rooms as functional spaces. Floor space in the UK for new build housing is the smallest in Europe. And research in 2012 suggested that people value natural light, space for storage and flexible spaces which allow for socialisation. There is also a general hierarchy of desirable housing which it is still often assumed that people will move through during their lifecourse, especially as they start families – i.e. starter flat, 2 bed flat, terraced house or maisonette, semi-detached house, detached house with garden – as well as a move from rented property to owner-occupier.

For many people however these aspirations are impossible. Drawing on 2001 Census data, research has shown that although social housing tenants make up only 21% of families with children, they make up 79% of those families living on the fifth floor of a building or above. In London, nearly one third (31%) of all families with children living in social housing were found to reside on the second floor or above.

Smaller dwelling sizes can also affect our health. Many people living in flats or tenements have to dry laundry inside, which has been shown in studies by the Mackintosh Environmental Architecture Research Unit and the University of Manchester to have health risks. Lack of outdoor space for children to play (whether communal or private garden space) also has negative impacts. It seems that many people have to downsize both their living space aspirations and their quality of life.

It’s hip to be dense

The fact that we pay a premium for space, just as people who can afford it can choose to pay more for housing near transport connections or in particular school catchment areas, is nothing new. But as the discussion on high-density housing and the quality of new housing shows, it can be argued that the trends of the housing market are disadvantaging a large proportion of the population, and also younger generations. Access to housing (and increasingly housing space) is becoming a highly political issue.

Public suspicion of high-density housing is being overcome through subtle rebranding – terms such as the ‘compact city’, ‘pocket housing’ and ‘micro-housing’ have a cool edge which try to appeal to young urban-living professionals. And many award-winning high-density schemes also now have a strong focus on communal gardens or space, providing elements that traditionally would be delivered in private space.

Regardless of the marketing (or policy impetus), the truth however is in the living. Do people feel they are compromising in their housing choices or is there a wider shift in aspirations? And more importantly, as space becomes a scarcer commodity, are we just introducing another marker of inequality into the mix?


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Empty homes … Britain’s wasted resource

Boarded up homes in Kensington, Liverpool. Image by Mikey via Creative Commons.

Boarded up homes in Kensington, Liverpool. Image by Mikey via Creative Commons.

By Heather Cameron

Government statistics indicate that there are just over 635,000 empty properties in England, with a third lying empty for six months or more. In Scotland, there are around 23,000 ‘long-term’ empty homes (unoccupied for six months or more) that are liable for Council Tax.

With increasing house prices and a continuing rise in homelessness, the demand for affordable homes in the UK is unlikely to subside. And with new housebuilding unable to keep up with demand, bringing empty properties back into use would seem an obvious solution that could go some way to easing the housing crisis as well as addressing the blight caused to local communities by empty properties.

Unsightliness, loss of amenity, anti-social behaviour, pest infestations, the devaluing of neighbouring properties and a negative impact on people’s health have all been cited as potential outcomes of empty homes.

However, while the government claims to be committed to reducing the number of empty homes, recent welfare reforms appear to contradict such intentions.

A recent Inside Housing article on empty homes in County Durham, suggested that the bedroom tax has had a direct impact on the increasing number of vacant properties in the area, with many landlords seeing an increase in the number of voids following its introduction. Single people used to be housed in two-bedroom properties (which make up the majority of the empty properties in the area), but this is no longer an option as the bedroom tax cuts the housing benefit of people under-occupying by up to 25%.

This has also had a knock-on effect on the costs to social landlords due to maintaining vacant properties. Local housing association, Accent, estimates that its vacant homes are costing it £600,000 per year due to costs like council tax and security.

Tackling the issue

Despite recognition of the problem, powers to help bring empty homes back into use have seemingly been underused by English councils. Empty Dwelling Management Orders (EDMOs) were only used 17 times in 2014, with councils preferring to use other powers such as council tax charging and compulsory purchase orders, despite EDMOs being specifically designed for the purpose.

A spokesperson from the Local Government Association (LGA) suggests that “the existing powers open to councils are complex and difficult to use. The government should simplify existing powers to support local authorities to bring empty properties back into use.”

In a report at the end of December 2014, the Institute for Public Policy Research (IPPR) has similarly argued that local authorities should be offered an enhanced set of powers to address the problem of empty homes. It recommends two changes to the current rules:

  • The existing cap on the ’empty homes council tax premium’ should be removed, effectively allowing local authorities to determine their own banded premiums charged on long-term empty dwellings.
  • Local authorities should be allowed greater discretion to tax long-term empty dwellings appropriately, and to ensure that those holding on to an empty property contribute more to the economic costs of providing housing for those in need.

Indeed, councils have previously called for the compulsory purchase order system to be simplified to bring empty homes back into use so perhaps such changes would make a difference.

Good practice

There are recent examples of good practice in reinstating empty homes through various approaches, such as homesteading, refurbishing and leasing, and repairing and selling.

Stoke-on-Trent City Council, for example, bid for funding from the Clusters of Empty Homes Fund so that it could renovate 124 long-term empty properties and bring them back into use.  The redeveloped properties were offered for £1 each to carefully selected buyers who had shown they would be actively engaged in the area’s regeneration.

According to the council’s Director of People, this initiative has resulted in the restoration of local pride and a new-found sense of community ownership that will drive lasting improvements.


Further reading

Some resources may only be available to Idox Information Service members.

Playing ‘house’ (redevelopment of empty homes), IN MJ, 15 Jan 2015, p21

Tackling the housing crisis: alternatives to declining standards, displacement and dispossession (2014) Centre for Labour and Social Studies

Re-imagining regeneration: empty and difficult to let homes (2014) National Housing Federation

Landlords revise threat of universal credit after delays, IN Inside Housing, 5 Dec 2014, pp10-11

Broken market, broken dreams: let’s end the housing crisis within a generation (2014) National Housing Federation

Ideas for change: community-led self-help housing, IN New Start, No 526 Nov 2014, pp1-7

Filling the void (Helena Partnerships and the private rental market), IN Inside Housing, 24 Oct 2014, pp28-30

Cutting back on waste (bringing empty homes back into use), IN Property Journal, May/Jun 2014, pp44-45

Evaluation of the Empty Homes Community Grants Programme (EHCGP): Midlands region (2014) University of Birmingham