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.


If you are interested in this topic, you may also be interested in the following blog posts:

Follow us on Twitter to see what is interesting our research team.

Digital inclusion in practice: how Reading Room is helping social housing tenants go online

IMG_20160120_101616

In 2012, a Housing Technology report found that almost half of the UK’s adult population who do not use the internet live in social housing. The report’s contributors (including the Chartered Institute of Housing, the National Housing Federation and Peabody housing association) argued that digital inclusion gives tenants more choice and control and better access to lower-cost, better services.

For housing associations, the impact of developing a digital strategy to engage with their tenants can be substantial. The report estimated that social housing landlords could achieve annual savings of £340m in communications costs.

The benefits of digital inclusion for social housing landlords and their tenants is explored further in the latest “In focus” briefing from The Knowledge Exchange.

Social housing: the digital revolution

Increasingly, social housing providers and tenants are connecting online through media such as Facebook, Twitter and online chat services. Other housing associations are offering interactive features on their websites, enabling tenants to check their rent accounts or to book appointments.

But, as the Housing Technology report showed, significant numbers of people don’t have online access. For some, it’s a matter of poor broadband coverage, while others have concerns about access costs and data security.

Our briefing includes examples of how social tenants and their housing providers can benefit from greater digital inclusion, and highlights ways in which the barriers to going online may be overcome.

Reading Room and Catalyst:

Among the examples of best practice featured in the briefing is a case study of a collaboration between Reading Room – a digital consultancy which joined the Idox Group in 2015 – and Catalyst, one of the leading housing associations in London and the South East.

Reading Room has worked closely with Catalyst and its customers to create a strategic framework for the housing association’s digital development. Among the themes emerging from this framework are projects for:

  • Optimising Catalyst’s web platforms for mobile devices and making them more user friendly
  • Developing a plan to implement new online services
  • Training and developing internal teams with digital best practices, including content creation and customer service through social media
  • Engaging the business and creating a team of digital champions
  • Embarking on an innovation programme towards building smart homes

Once the work is complete, Catalyst customers will be able to report and track issues directly through a new web platform, while contractors can view available jobs and location data.

20151112_114012_resized

Future plans

Further down the line, Reading Room and Catalyst are working on plans to use the Internet of Things to create smarter buildings with sensors that can detect changes before they become problems, notify the repair company and update the customer automatically.

The collaboration between Reading Room and Catalyst highlights the exciting potential of technology for improving communications between social housing providers and their tenants, and for encouraging more people to reap the benefits of going online.


Members of the Idox Information Service can obtain access to the full text of the In focus briefing on digital inclusion and social housing here

Follow us on Twitter to see what developments in policy and practice are interesting our research team.