Industry news


Survey of tenants shows average private renter may not exist


W


ide disparities in the rents, personal finances and aspirations of tenants in the private rented sector have been


revealed in a survey carried out by the Nationwide Building Society. After paying all of their bills more than a third of


tenants (36 per cent) exist on £100 or less each month, while one in eight (12 per cent) say they have no disposable income left at all, including some 17 per cent with children in their household. At the other end of the spectrum, one in sixteen (6 per cent) claim they have more than £1,000 left to play with each month, including 11 per cent of those based in London. Among the headline findings from a survey of


more than 2,000 tenants of private landlords, were the following: • Almost a half of tenants are renting because they cannot afford to buy their own home, while one quarter are saving up for a deposit;


• One in three renters live alone, rising to 45 per cent of retired renters and 40 per cent of those who are unemployed;


• One in eight have lived in their current home for at least 10 years, although the average length is four years; and


• Men are left with over £100 more disposable income each month than women, on average.


Almost half of those surveyed (46 per cent) said


their main reason for renting was they could not afford to buy. For more than one in ten (11 per cent) a change in circumstances, such as the breakdown of a relationship, leaves them renting – and the likelihood of this grows with age, with 15 per cent of over 55s citing this as their main reason for renting.


The stereotype of students eeking out a chaotic


existence in a communal house no longer typifies those renting a home from a private landlord. Tenants are more likely to be couples (47 per cent) or those living alone (30 per cent), rather than young people living with university friends (7). More than a third of men surveyed rent a home alone, compared to one in four women, with lack of affordability or a change in life circumstances most likely to be the cause.


EUROPEAN TRENDS Nationwide’s Director of Specialist Lending, Paul Wootton, said: “It’s clear renting is not a one size fits all experience. With one in five renting a home and many expected to rent throughout their lives, tenant’s priorities differ according to where they are in their life, in the country or in their own housing journey. “Where older generations assumed they would


own their own home, for many today long-term renting is considered the new housing normal – as it is in much of Europe. We’re already working with landlords to ensure a private rented sector that recognises different needs and works fairly for everyone.” The most important consideration when


choosing a home to rent for one in four (25 per cent) was cost or affordability. For one in ten it was location or availability. One in 14 chose based on the standard of the property, while one in four chose on its layout or facilities. One in 20 selected a property based mainly on whether the landlord accepted pets and one in 50 chose a property on whether landlords accepted benefit claimants. Once they had made the decision to rent, a third


found their new home through an online website. More than a quarter sourced their home through a lettings agent. One in five turned to family and friends for help to find a home while one in 25 found their property through an ad in their local newspaper. Tenants renting from a private landlord stay an


average of four years and two months, though almost one in three stay for five years or more and one in eight stay for a decade or more. According to the study, the older the tenant, the longer they seem to stay, with average length of tenancy duration for 18-24 year olds at just over a year, 25-34 year olds at two years four months, 35-44 year olds at four years five months, 45-54 year olds at five years eight months and those 55+ staying six years nine months in the same home.


FINANCIAL WORRIES The average UK monthly rent is £562.05, though one in seven pay more than £800. After paying for food, rent and bills, the average Brit has £314.45 in monthly disposable income left – although men are left, on average, more than one hundred pounds better off than women (£372.84 v £264.69). Almost a quarter were trying to save towards a


mortgage deposit or to buy a new home, and one in 10 towards a car or other transport. One in 14 were saving for children, one in 20 for a new rental deposit, five per cent for furniture or white goods, and four per cent for further education or training. However, three in 10 were not saving at all, with 85 per cent of them stating it was because they could not afford to. One in five believe the worst thing about renting


is that it is a waste of money because others (their landlords) are profiting and this is felt most keenly among 25-34 year olds. Lack of security, including not knowing when they would be asked to leave, was the most concerning aspect for one in seven, though most acutely felt by those not working and those with children. The major gripe for one in sixteen is the repeated


cost of moving, and for another six per cent the poor quality of their accommodation. For one in 25 tenants the worst thing about renting is not being allowed to have the companionship of a pet living with them.


News in Brief


• Borrowing by housing associations rose by a third in the last financial year, the Regulator of Social Housing has reported. In its final quarterly survey for 2017/18, it showed that HAs agreed £10.1bn of new facilities in the year to March, up from £7.6bn in the previous year. The regulator concluded that the HA sector remains financially strong, with £17.2bn of undrawn debt still available. In total, the sector has agreed borrowing worth £89.1bn, £57.8bn of


which are bank loans. If further borrowing is necessary, HAs estimate there is enough security across the sector to support £48bn of new borrowing.


• Housing associations reduced their spending on repairs and maintenance for the second year running in response to the Government’s enforced 1 per cent a year rent cut. Data from the English regulator’s global accounts revealed that spending by HAs with more than 1,000 homes fell 1.7 per cent to just below £3.2bn in 2016/17. The biggest percentage fall was in major repairs expenditure, which fell 11.3 per cent from


£524.5m in 2015/16 to £465.5m in 2016/17. Spending on day-to-day repairs fell by 1.5 per cent to just under £1.9bn from £1.93bn in 2015/16.


• French multinational energy firm Engie is launching a £15m venture into Britain’s retirement housing sector. The firm plans to develop homes specially designed for the over 55s in partnership with local authorities. It is targetting a possible gap in the market between the luxury retirement housing sector and specialist social housing providers.


www.housingmmonline.co.uk | HMM July 2018 | 17


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