Empty homes in the UK: the true picture
If bringing empty homes back into use could be an easy win, why is more not being done, asks Jan Ambrose?
Newly-released government statistics from the English Housing Survey 2017-18 show a welcome increase in home ownership, but also that the private rented sector both continues to grow and lags behind in quality and standard.
RICS welcomes the increase shown in the survey in home ownership in the 35-44 year age group, which is up 5% on the previous year. However, the percentage of home ownership within this age range is still below the pre-crash rate of 71% 10 years ago. While owner-occupier is still the largest tenure in this age group, the proportion in the private rented sector (PRS) has grown from 13% to 28% in the last 10 years. Those under 45 still make up around two-thirds of people within the PRS.
There has been a lot of intervention within the market by government to stimulate home ownership. The average age of a first home buyer is 33, supporting the report’s finding that it isn’t until the 35-44 age group that owner-occupier is a larger tenure than PRS.
Among the 25-34 age group, PRS is the largest tenure at 44%, up from 28% 10 years ago, with home ownership decreasing from 55% to 38%.
As a tenure, owner-occupier is still the largest representing 64%. Though this is lower than the highs of the early 2000s, it is not significantly different home ownership rates in the 1980s.
Among owner-occupiers there are, according to the report, more outright owners than mortgagors, reflecting that the tenure is dominated by those who bought many years ago.
Of those who own their home outright, 64% are over 65. This isn’t surprising, as no matter the current state of housing and affordability, those who have owned homes longest are most likely to have paid off their mortgage. However, the same age group is also most prevalent within social rented sector. This highlights that care and housing for the elderly is as important, and in need of attention, as getting first home buyers on the housing ladder.
The economic status and household type of the PRS reinforces that it is young professionals and families who are being priced out of ownership. Around three-quarters of those within the PRS work full time, with only 5% in full-time education and 12% in part-time work.
Between the 2007-08 and 2017-18 surveys, there was an increase of 795,000 households with dependents within the PRS. In the same period, and within households with dependents, there was a decrease of 702,000 households buying with a mortgage.
The need for two incomes to buy a house was highlighted, with 47% of first-time buyers being couples without children and a decrease of one-person household, first-time buyers (from 26% in 2007-08 to 16%).
On average, owner-occupiers with a mortgage spent 17% of their household income on mortgage payments. This compares with the PRS, where rent constituted 33% of household income, and the SRS (28%).
The PRS accounts for 19% of households, or around 4.5 million people. While this has doubled as a proportion from 2002, it has been steadily at this rate since 2013-14. PRS as a tenure is more prevalent in London (29%) than the rest of the country (18%), but the growth in the size of the tenure was the same across the country.
Rents differ significantly between London and the rest of the country, particularly between the PRS and SRS. On average, PRS rent in London is £312 per week, around twice that outside London (£158). Social renters in London pay on average £133 a week compared to £96 outside the capital. This disparity compounds affordability issues, especially in light of the proportion of household income spent on rent.
The highest proportion of dwellings that failed to meet the Decent Homes Standard was within the PRS at 25% (13% SRS; 19% owner occupier). The PRS also had the highest proportion of homes with a category 1 hazard (14%), though this has decreased from the 2008 level of 31%. Though the proportion of homes failing to meet the Decent Homes Standard has decreased, improvement has stalled in recent years.
Dwellings within the PRS were most likely to be older (35% built before 1919). They were also least likely to have one working smoke alarm (with Housing Association tenants the most likely) and least likely to have central heating.
Only 73% of tenants reported that their deposit was registered with a government-backed tenancy deposit protection scheme, though 20% did not know if their deposit was protected or not. This highlights that there is not only a need to protect tenants, but also to educate them about their rights.
RICS is drafting a new code of practice for RICS professionals working within the PRS, but would like to see government-backed regulation and standards for all landlords and agents.
The survey does not reflect the changes the government made in late-2018 raising the cap on local authority borrowing and enabling them to start building.
The survey highlights the need for local authorities to build to meet local needs, as housing associations house most social renters. Ten years ago, local authorities and housing associations housed roughly 50% each of social rent tenants; in 2017-18 they house 10% (2.4 million) and 7% (1.6 million) respectively as a proportion of total housing population.
73% of local authority housing stock was built between 1945 and 1980, with only 10% of local authority stock built after 1980. This is compared with housing authority stock which is 49% and 35% for the same time periods.
The proportion of households in the SRS living in overcrowded accommodation increased from 2016-17 from 7% to 8%. This is the highest proportion of overcrowding within the SRS since the survey started recording overcrowding in 1995-96. It is also higher than the PRS (6%) and owner-occupiers (1%).
The need for housing to meet the needs of those in the SRS is compounded by the fact that, despite the highest proportion of overcrowding since it began recording, 10% of homes within the SRS are under-occupied (up from 8% the previous year). Under-occupation is, as expected, higher in the PRS (15%) and among owner-occupiers (54%).