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Searching for 'generation rent': Identifying niches in the private rented sector
Ben Pattison
Housing and Communities Research Group9th April 2015
Summary
Can we find ‘generation rent’ in the PRS? Niches or sub-markets within the PRS Difficulties with identifying niches Birmingham as a case study Niches operating within the PRS in the city Reflections on housing circumstances of
younger households within the tenure
Generation rent:
“a generation with no realistic prospect of owning their own home in the next five years and who lack the long-term saving mentality that most need if they are to get on the housing ladder” (Blackwell and Park, 2011, p. 2).
“With house prices continuing to soar out of reach, and typical deposits for first time buyers hitting £30,000, younger generations are seeing their dream of home-ownership replaced with a life of renting” (National Housing Federation, 2015).
Generation Rent: Half a million people blocked from the property ladder since the Government launched Help to Buy (03/10/14)
Searching for ‘generation rent’ Most common popular narrative emphasises that ‘generation
rent’ consists of younger households who have been ‘priced out’ of owner occupation and have turned to private renting
But does this fit with what we know about the private rented sector (PRS)?– “a sector that defies sweeping generalizations” (Aalbers &
Christophers, 2014) – consists of different sub-markets or ‘niches’ (Rugg & Rhodes,
2008) Can we find ‘generation rent’ in the PRS?
Niches in the PRS Taken from the review of their PRS in 2008:
“demand and supply characteristics, distinctive rental practices and – in some cases – specific types of central policy intervention that shape the way the sub- market operates” (Rugg & Rhodes, 2008: xiv).
Provides a framework to understand the diversity of the PRS
A (non-exhaustive) list of niches
Rugg/Rhodes PRS niches Young professionals Students The housing benefit market Slum rental Tied housing People on high incomes, high rents Middle age, middle market renters Immigrants Asylum seekers Temporary accommodation Older tenants and regulated tenancies
Issues with the Rugg/Rhodes approach to niches
What is a niche/submarket? (e.g. Watkins, 2001)– Which factors to include in the niche analysis
(tenancy, household type, cost, landlord…)– How to distinguish between niches– The spatial distribution of niches
Particular issues with Housing Benefit niche (e.g. Blackpool).
Is there a ‘generation rent’ niche?
Birmingham case study
Use a case study approach to identify niches within one housing market
Provide a starting point to investigate diversity of housing circumstances in the PRS
Why Birmingham?– Largest local authority in the country– Should contain a range of niches– Access to Housing Benefit data
Investigating niches in Birmingham Define a niche as a distinctive spatial configuration
of tenants, landlords and stock within the private rented sector
Methodology:– Geodemographic analysis of census data for
household and stock at output area level– Housing Benefit data (April 2011) then added at
ward level Key limitation: landlord data
BBC News (http://www.bbc.co.uk/news/uk-england-29949033)
Change in the relative size of private rented sector, Birmingham, 2001 to 2011
Legend
Output_Areas_2011_EW_Full_Ext
Change Rented from: Private landlord or letting agency %
-13.08 - 3.68
3.69 - 9.54
9.55 - 17.49
17.50 - 38.98
38.99 - 86.06
±0 1 20.5 Miles
Source: Author’s calculation based on 2001 and 2011 censuses
Housing Benefit (HB) within Birmingham HB claimants accounted for:
– 38% of PRS in April 2011– 40 to 55% of growth of PRS in the city between 2001
and 2011 Key trends within HB:
– Younger households– Single persons households (40% of HB)– Growth of in-work claimants (Pattison, 2012)
– Smaller properties (e.g. terraced)
Birmingham niche classification City Centre Living (spatially defined, PRS dominant, low HB, new build
flats)
Students Around Campus (spatially defined, PRS dominant, low HB, HMO)
Young Professionals (spatially defined, PRS above average, low HB, mixed stock)
Housing Benefit Dominant (PRS above average, HB = 90%+ of PRS, terraces)
City Centre Fringe (PRS around average, moderate HB, terraced stock)
Suburban Diffuse (lower than average
PRS, moderate HB, mixed stock)
Dominant private rented sector niche in each ward, Birmingham, April 2011
City Centre Living
Students around Campus
Young Professionals
HB Dominant
City Centre Fringe
Suburban Diffuse
Key findings
The PRS in Birmingham is very diverse Diversity consists of both households and
stock (potentially also landlords) Several niches are highly spatially defined At least half of the growth within the PRS
appears to be in niches which fall outside the ‘generation rent’ narrative (e.g. students, HB)
Conclusions Simple ‘generation rent’ narratives are challenged by
diversity of private rented sector Appears that younger households have diverse housing
circumstances (and pathways?) within the PRS HB changes “will inevitably reduce choice, especially for
young people… Poorer tenants will be priced out of the more expensive areas, leading to greater social divisions and jeopardising the creation of mixed communities”
(Clapham, Mackie et al, 2012)
Chaotic pathways? Relationship between capital and housing pathways
in Amsterdam “young people make use of various forms of capital
to gain access to specific sections of the housing market”
“Young households can either follow a chaotic pathway deliberately and relatively successfully or become trapped in a chaotic pathway”
(Hochstenbach & Boterman, 2014)
ReferencesAalbers, M.B. & Christophers, B. (2014) The Housing Question under Capitalist Political Economies. Housing, Theory and Society. [Online] (October 2014), 1–7.
Blackwell, A. & Park, A. (2011) The Reality of Generation Rent: Perceptions of the first time buyer market. London, National Centre for Social Research.
Clapham, D., Mackie, P., Orford, S., Buckley, K., et al. (2012) Housing Options and Solutions for Young People in 2020. York, Joseph Rowntree Foundation.
Hochstenbach, C. & Boterman, W.R. (2014) Navigating the field of housing: housing pathways of young people in Amsterdam. Journal of Housing and the Built Environment.
National Housing Federation (2015) High house prices breed a new generation of “ revolving door ” renters. [Online]. 2015. Available from: http://www.housing.org.uk/media/press-releases/high-house-prices-breed-a-new-generation-of-revolving-door-renters/ [Accessed: 27 January 2015].
Pattison, B. (2012) The Growth of In-Work Housing Benefit Claimants: Evidence and policy implications. Coalville, BSHF.
Rugg, J. & Rhodes, D. (2008) The Private Rented Sector: Its contribution and potential. York, The University of York.
Watkins, C. (2001) The definition and identification of housing submarkets Environment and Planning A 33(12) 2235 – 2253
