English housing survey snapshot

publication date: Mar 6, 2017
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

What's the housing situation in England?

The English Housing Survey (EHS) is one of the most interesting and useful reports on our housing stock that exists. Here is my summary of the latest findings for housing in England, plus a few of my thoughts.

I’ll do a more detailed analysis when the full report comes out in the summer.

Owner occupation unchanged for third year running
There are around 22.8 million households in England of which 63% are owner occupied. The amount of owner occupied households rose throughout the 1980s to 2003 reaching a peak of 71%. Post 2003, the rate steadily declined to its current level which has remain unchanged since 2013-14.

Kate’s thoughts…
It’s no surprise that home ownership is no longer on the decline. One of the major things that most analysts seemed to have forgotten is that from 2007 to 2013, in many areas, our housing stock was falling in price – on average around 20% and in areas like N.Ireland by a dramatic 50%.

So, first-time buyer average ages went up (sensibly) during this time, as did the percentage of people buying versus renting. In my view, it’s bizarre that this hasn’t yet been picked up.

However, the initially much-criticised Help to Buy Scheme has definitely helped to turn the tide and, with more schemes announced in the recent white paper, we may even see this grow in the future. Especially as it’s currently predicted housing will become more affordable nationwide, with lower capital growth rates expected on-going.

The composition of owner occupiers has changed
There have been more outright owners than mortgage holders since 2013-14, and in 2015-16, the proportion was even higher, with 34% of households owning their property outright. Meanwhile, the percentage of mortgagors has dropped from 31% in 2013-14 to 29% in 2015-16. This is partly the result of an ageing population, with people paying off their mortgages as they head towards retirement.

Kate’s thoughts…
I find it funny how we aren’t singing from the roof tops that over half of home owners own their property outright – with no mortgage. That means if even the housing market goes pear-shaped, they won’t necessarily be forced to sell their homes.

And with low interest rates, we are also looking at the lowest repossession rates since 1982. So, on the one hand, we talk incessantly about a housing crisis but, on the other, most existing homeowners are doing just fine and, for them, there is no crisis!

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The private rented sector (PRS) continues to be larger the social rented sector (SRS)
In 2015-16 the PRS made up 20% of English households (4.5 million) and the SRS made up 17% of households (3.9 million) – no change for either since 2014-15.

Kate’s thoughts…
This is an interesting stat and yet another one ignored. In my view, the main reason there are more people – and especially families – in the PRS is due to the lack of building of – and, indeed, selling off of – council homes.

Add to this a larger student population and the much talked about immigration levels and of course you have a growing PRS. Where else would these people live?

It’s really time government and lobbying groups woke up to the fact that the PRS is growing, it’s here to stay, but the majority of people in it are not vulnerable, they are there because it makes sense for them to rent, not buy.

For those on benefits and in the PRS due to government policy NOT to house them in the social sector, guess what? Housing benefit bills will go up and because it’s easy to identify who on benefits is renting, it’s also easy – and possible in my own experience – for local authorities to do a lot more to ensure they rent from reputable landlords.

It’s time to stop blaming landlords and letting agents for problems in the PRS and look at what the government and local authorities should be doing to protect the vulnerable, especially those on benefits – that’s their job!

During the last decade the number of families (households with children) in the PRS has increased and the number in the SRS has decreased
Between 2005-06 and 2015-2016 proportion of families in the PRS went up from 30% to 36%. Taking into account the overall increase in the number of private renters over the last decade, this translates to just under 950,000 more family households in the PRS.

In the same time period, the number of families in the SRS has fallen by 123,000; from 36% to 32% of social renters.

There was no significant change in the proportions of families who owned property outright or with a mortgage.

Proportion of social renters expecting to buy has risen but not private renters
In 2015-16 almost 60% of those in the PRS (2.6 million households) and 27% of social renters (1 million households) expected to buy in the future.

The proportion of private renters expecting to buy has remained the same as 2014-15 whereas the proportion of social renters has risen 3%.

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Private renters spend more income on housing costs
Households in the PRS spend a much larger proportion of their income on housing costs than mortgagors or those in the SRS:

  • Mortgagors spend 18% of household income on mortgage payments;
  • Social renters spend 28% on rent;
  • Private renters spend 35% on rent.

Kate’s thoughts…
This isn’t a surprise as they are renting their property and don’t have to incur any maintenance costs. Also, with many mortagees paying off their loans as they get older and in particular with first-time buyers having to pay on a repayment basis, then these figures aren’t quite so useful as they appear.

What is interesting though, is that in the government housing white paper they claim 50% of earnings is spent on renting in the private sector; looks like they have their own facts and figures very wrong!

The rate of overcrowding remained steady among private renters and owner occupiers, but went up in the SRS.

In the SRS, overcrowding reached its highest level, 7%, in 2010-11, dropped to 6% between 2012-15 before peaking at 7% again in 2015-16. 5% of PRS households are classed as overcrowded and this drops to just 1% for owner occupied households.

Half of owner-occupied households are under-occupied
The amount of under-occupied households in the owner-occupied sector has risen by 13% over the last two decades, from 39% to 52%, meaning 7.4 million households are now under-occupied.

However, in the same period, the proportion of under-occupied households in both rental sectors has fallen:

  • Under-occupation among private renters decreased from 18% in 1995-96 to 14% in 2015-16;
  • Under-occupation among social renters decreased from 12% to 10%.

Kate’s thoughts…
This isn’t really a surprise either. You buy a house for your kids, stay in it for 20 years and then they leave. You stay put and want a home they can come back to themselves or visit when they have kids of their own.

But in the social sector, it does look like the recent ‘bedroom tax’ may have had an influence on the number of people moving out of their home into a smaller property as these are quite big changes.

Energy efficiency
The number of properties with the top energy efficiency rating has increased markedly in the last decade, especially in the SRS.

In 2015, almost 30% of dwellings had a rating of A-C, up from 5% in 2015. Nearly 50% of dwellings in the SRS had an A-C rating, this figure drops to 26% in the PRS and 24% of owner occupied properties.

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Kate's thoughts
This is great news and it’s good that people’s homes are more energy efficient – especially as energy bills keep increasing.

What’s interesting is that these figures suggest that properties in the PRS are now more energy efficient than owner-occupied homes, meaning although tenants pay more in rent, they are renting properties which have lower heating bills as well as no maintenance costs.

Smoke and carbon monoxide alarms.
Bv 2015-16, 89% of households had at least one working smoke alarm, up 5% from 2008-09. However, in 2015, just 28% had one or more working carbon monoxide alarms. Owner-occupied properties were most likely to have a carbon monoxide alarm (31%), followed by social rented homes (28%), then homes in the PRS (21%).

Kate’s thoughts…
There’s clearly some work to do in the PRS on carbon monoxide. I’ve got one and, to be honest, if I had a tenanted property, whether I needed one legally or not I’d get one fitted and professionally checked. It’s a small price to pay to protect your tenant’s life.

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