Survey confirms welcome signs of housing improvement ? but low rates of construction
Published: 31 July 2013 | Author: Bernard Clarke
The 2011-12 headline report of the English Housing Survey, published earlier this month, reported a series of key developments in housing in different tenures. Lenders continue to fund housing in the private and social rented sectors – as well, of course, as in home-ownership – so the way in which the stock of homes in England is evolving is important to those who finance housing, as well as those who live in it. Today, we look at some of the key findings in the latest report from the long-standing English Housing Survey, which shows:
- Continuing expansion of the private rented sector. Privately rented accommodation has been the fastest growing tenure in England in recent years, partly funded by lenders and buy-to-let investors. At 3.8 million, the number of households in the private rented sector has now grown to equal the number of homes in social housing. In 2011-12, over two-thirds of households (65%) are still occupied by owner-occupiers, but the total is down from a peak of almost 71% in 2003.
- Almost two-thirds (64%) of households in the social rented sector are paid housing benefit, compared with around a quarter (26%) of those in the private rented sector. Changes in payment of housing benefit being implemented by the government may affect the income stream of social landlords, in particular, and may therefore have implication for lenders funding the sector.
- No significant changes in overcrowding. Overcrowding affects just 1% of owner-occupied households, although it is more prevalent in the social (7%) and private rented sectors (6%). Conversely, rates of under-occupation of property remain substantially higher in the owner-occupied sector (49%) than among those living in social housing (10%) or in privately rented accommodation (16%).
- The energy efficiency of homes continues to improve, with the social rented sector having the highest proportion of the most energy-efficient homes.
- Almost a quarter – 24%, or 5.4 million – of English houses do not meet the "decent homes" standard. Despite this high number, the total has reduced by more than half a million since 2010. The proportion of "non-decent" homes is lowest in the social housing sector (17 %) and highest among those renting privately (35%).
Trends in tenure
Owner-occupation remains the most common tenure, with 14.4 million households (65%, a similar proportion as in 2010-11). In recent years, the strong growth of the privately rented sector (partly funded by buy-to-let lending) has contributed to a steady narrowing between the numbers of households living in the social sector and those renting privately. By 2011-12, the proportion of households in the private rented sector had grown to 17% from just 10.1% a decade earlier.
Households owning their home outright (that is, without a mortgage) were often older, with 58% aged 65 or over. The majority of owner-occupiers buying with a mortgage were in the 35 to 54 age range (64%). Just 10% of all owner-occupiers were aged under 35.
Half of all those renting privately (1.9 million) were aged under 35, with 577,000 (15%) aged 16 to 24 and a further 1.3 million (35%) aged 25 to 34. The social rented sector had a much higher proportion of older tenants, with 29% aged 65 or over. In the private rented sector, just 8% are in this age range.
Couples with no dependent children were the most common group of English households, comprising more than one-third (35%) of the total. Such couples were more common in the owner-occupied (43%) than in the private rented sector (25%). The proportion of lone parent households was higher in both types of rented accommodation than in the owner-occupied sector: 15% of those in social housing and 11% of those renting privately were lone parents with dependent children, compared with only 3% of owner-occupiers.
Length of residence
Perhaps not surprisingly, housing turnover is most rapid in the private rented sector. Almost one-third of those renting privately (32%) had lived in their current home for less than a year, compared with only 3% of owner-occupiers and 9% of social tenants. More than three-fifths (61%) of home-owners and 44% of social tenants had been in their home for at least 10 years, compared with just 9% of those renting privately.
Table One: Length or residence in current home by tenure, %
|Less than one year||One to two years||Two to three years||Three to four years||Five to nine years||10 to 19 years||20 to 29 years||More than 30 years|
A total of 381,000 new households were formed in 2011-12, with the majority (259,000, or 68%) in the private rented sector. There were some 75,000 new households in owner-occupied homes (20% of the total) and 48,000 (12% of the total) in social housing.
Most existing households moving home have done so without changing tenure: 59% of owner-occupiers, 78% of social tenants and 81% of those renting privately moved within the same tenure group. Of those moving to a different tenure group, owner-occupiers were far more likely to move into the private rented sector than into social housing.
In 2011-12, around half a million households (523,000, or 2%) contained members who had previously given up a home because of difficulties in paying the mortgage. Of those, 141,000 were currently owner-occupiers. More than half (59%) who had given up a home had sold it to avoid getting into mortgage arrears or court action by the lender. In 41% of cases, the lender had taken over the property, either through a court action or with the occupier leaving voluntarily.
Overcrowding and under-occupation
Owner-occupiers were more likely to occupy homes with three or more bedrooms, with more than 75% falling into this category. Less than 35% of social tenants but more than 41% of those privately renting lived in homes with three or more bedrooms. Those in the social rented sector were the most likely to live in single bedroom homes, with 31% in this category.
The overall rate of overcrowding in England in 2011-12 was 3%, but only 1% of owner-occupiers lived in overcrowded homes, compared with 7% of social tenants and 6% of those renting privately.
Around eight million households were estimated to be under-occupying, with at least two bedrooms more than they needed, according to calculations under the "bedroom standard." Under-occupation was much more common in the owner-occupied sector, with almost a half (49%) under-occupying, compared with 16% of those renting privately and 10% of social tenants. A further 7.7 million households (35%) had one bedroom more than they needed under the bedroom standard calculation: 5.2 million of those in owner-occupation, 1.3 million renting privately and 1.1 million in social housing.
Almost three-fifths (59%) of those renting privately and 20% of social tenants said they expected to buy a property at some time in the future. More than one-fifth (22%) of those renting privately and 8% of those living in social housing expected to buy within two years. In contrast, more than two-thirds of social tenants expecting to buy and 45% of those renting privately but expecting to buy thought that it would be at least five years before they would be able to become owner-occupiers.
Energy efficiency and decent homes
The energy efficiency of the housing stock in England has continued to improve. Social housing was, on average, more energy efficient than housing in the privately rented sector, although the rate of improvement in energy efficiency between 1996 and 2011 was marginally better in the private rented sector. Energy efficiency in owner-occupied homes saw the slowest rate of improvement during that period.
Some 5.4 million dwellings in England failed to meet the decent homes standard, although the number had fallen by more than half a million since 2010. Housing conditions improved in all tenures, but the greatest progress has been in social housing, where the number of ‘non-decent’ homes declined from 1.1 million in 2006 to 660,000 in 2011.
The English Housing Survey provides an important series of data on tenure, housing stock and household characteristics. The latest findings continue to show welcome improvements in housing quality. Perhaps the biggest challenge, however, is to increase the number of English homes overall. Current housing construction rates are among the lowest in post-war history – and are failing by more than 50% to keep pace with the rate of household formation.