The last decade has seen a phenomenal growth in the private rental sector, with the numbers having risen by 20% over the last ten years.
It is probably safe to say that much of this growth could be attributed to ‘Generation Rent’, the people who 20 years ago, may have become home owners in their early to mid-20’s, who now find that high deposits are delaying purchase of a property until their 30’s.
Unable to buy, they look for good private rented accommodation, giving them time to accumulate a deposit, to become established in their careers, able to move areas for better opportunities. The number of owner-occupiers has dropped from a high of 71% of households in 2003 to 63%, the lowest level since 1986.
This is understandable, and whilst all may regret that the younger generation are taking far longer to gain a place on the property ladder, a surprising statistic is the fact that there has also been a drop in the number of households with young children in the social sector.
Over the same 10-year period, 2005/6 to 2015/16, the number of households with children in the social sector dropped by approximately 123,000, from 36% to 32%. Whilst in the private rental sector, there was an increase of nearly 1,000,000 households with children, a rise from 30% to 36%, that now make their home in what had been previously perceived as insecure accommodation.
Whilst there are landlords who behave badly and bring disrepute to the private rental sector, these statistics perhaps prove that many private landlords are providing decent accommodation and are no longer perceived by tenants as the poor landlords they are often portrayed as in the media.
The fact the private rental sector can afford more flexibility. Properties in nicer areas than some of the characterless council estates of the 50’s and 60’s, in areas closer to family members, access to what are believed to be better schools. These factors cannot be disregarded as positive aspects to the private sector. Landlords with properties in more salubrious areas should look for families that can provide good references, are likely to appreciate the accommodation and look to stay long-term – the landlords’ dream.
Landlords with family accommodation may look at these statistics with some satisfaction; families are obviously turning to them; local authorities may be working more closely with them, assisting them with grants and advice. But what of the landlords who have small properties, houses in multiple occupation? Is there an increased demand for their properties?
There almost certainly is, with the prevalence of second marriages leading to second families and first family children feeling in the way, sometimes even needing to escape violence, sexual harassment and bullying.
Many landlords have chosen not to rent to the under-25’s since the introduction of single room rents in 1996; others made a decision based on bad experiences with the young, but some wanted to help the vulnerable, unable to live in the family home.
There will now be no automatic right to the Universal Credit housing element for those aged 18-21. There will be exceptions where it would be inappropriate for the applicant to live in the family home, but will need the tenant to make a case for why they should be considered exempt. Not always easy for a vulnerable, awkward, young person with pride. Who will take them?
In a survey of 1,000 landlords undertaken by the Residential Landlords Association, 76% of them felt this would mean the Under-21’s could not afford to pay their rent and this would make them unwilling to take this age-group.
It seems there will be private sector landlords who will have their properties in high demand, with good, long-term tenants. There will be other landlords who find that they are forced to accept older tenants, possibly with drug or alcohol issues, who would rather have taken a younger tenant, perhaps with the parental support, to help them make their first steps to independent living.
What the young people will be left with are hostels and the issues associated with hostel living. What landlords will be left with are the tenants no-one really wants to take.
For advice on buy to let issues – Ask Sharon