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Private tenants are getting older, while their rental properties are getting more energy efficient

It’s a well known fact that the private rented sector has doubled in size over the past 20 years, fuelled to a large degree by individuals who jumped on the buy-to-let band wagon, as they reckoned property was a better investment than low interest savings accounts.

Across the whole country, private rentals now account for nearly one in five of all residential properties, while in the capital it’s even higher and at 27 per cent, it’s more than one in four. But tenants in London are paying the price for their cosmopolitan lifestyle.

Just how much more they are paying for the privilege is revealed in the latest headline report from the English Housing Survey. The EHS is a national survey of people's housing circumstances and the condition and energy efficiency of housing in England. It is one of the longest standing government surveys, full of interesting facts and trends, and was first run in 1967.

To meet ambitious targets, there is a very strong case for increasing investment in energy efficiency measures

Patrick Mooney Patrick Mooney Editor of Housing Management and Maintenance magazine

Costly capital living

Not surprisingly we learn that private rents are higher in London than outside the capital. In fact, in 2018/19 the average private rent in London was £341 per week, making it more than double the average rent outside London (£162 per week). Between 2017/18 and 2018/19 there was a 10 per cent rise in private rents in London.

On average, private tenants spend about 33 per cent of their income on rent payments compared to 27 per cent for social renters, while those buying their home with a mortgage spent 18 per cent of their household income on mortgage payments.

In 2018/19, 20 per cent (924,000 households) of private renters and 57 per cent (2.3 million households) of social renters received Housing Benefit to help with their rent payments. The chancellor has announced that local housing allowance rates will be unfrozen from April. At present benefits only cover rents for the very cheapest of properties and campaigners want the link to the lowest 30th percentile of rents to be restored.

Generational changes

Getting back to the subject of age (as quoted in the headline) those under 35 have always been over-represented in the private rented sector. In 2003/04, some 21per cent of those aged 25-34 lived there. By 2013/14 this had risen to 48 per cent. However, since then, there has been a steady decrease to 41 per cent of those aged 25-34 living in the private rented sector in 2018/19.

Over the last decade, there has been a significant rise in the number of people aged 55-64 living in the rented sectors, including a three percentage point increase in the private rented sector (from 7 per cent in 2008/09 to 10 per cent in 2018/19), and a three percentage point increase in the social rented sector (14 per cent in 2008/09 to 17 per cent in 2018/19).

Over the same period there has also been a significant increase in the proportion of households with children in the private rented sector, up from 30 per cent in 2008/09 to 37 per cent in 2018/19.

The number of households with dependent children in the private rented sector has risen by about 765,000 in ten years. Many of these families require secure and affordable housing, but the number of homes being built by councils and housing associations is wholly inadequate to meet demand.

Private renters are a breed apart

The proportion of households consisting of a lone person sharing with other lone persons (house sharers) was, not surprisingly, much higher in the private rented sector (10 per cent) than among owner-occupiers and social renters (both at 2 per cent).

About three quarters (74 per cent) of private renters were working, with 63 per cent in full-time work and 10 per cent in part-time work. Smaller proportions of private renters were retired (8 per cent), in full-time education (7 per cent), or unemployed (3 per cent).

Over a quarter of households (27 per cent) in the private rented sector had one or more household members with a long-term illness or disability. For social renters this figure was 53 per cent. The proportion of owner occupied households with one or more household members with a long-term illness or disability was 31 per cent.

Living conditions

Overcrowding is more prevalent in the rented sectors than for owner-occupiers. In 2018/19, only 1 per cent of owner-occupiers (187,000 households) were overcrowded compared with 8 per cent of social renters (318,000) and 6 per cent of private renters (283,000).

In 2018, 18 per cent or 4.3 million homes failed to meet the Decent Homes Standard. The private rented sector has the highest proportion of non-decent homes (25 per cent) while the social rented sector has the lowest (12 per cent), largely achieved through huge investment since the year 2000. Among owner occupied homes, 17 per cent failed to meet the decency standard.

While the private rented sector had the highest proportion of homes with a Category 1 hazard, there was a notable decrease in the proportion of stock with such hazards, from 31 per cent in 2008 to 14 per cent in 2018. This is likely the result of many newer homes entering the private rented stock, but it also supports the case for significant state investment through grants, loans or reduced taxes to improve the condition of rental homes.

Whether the chancellor responds positively with extra money only time will tell. A game changing policy he could support would be the development of batteries that could safely store energy produced at home in solar panels and the like, possibly using old world technologies like storage heaters.

Rising damp?

In 2018, 2 per cent of our homes had problems with condensation and mould; 1 per cent were affected by rising damp and 1 per cent by penetrating damp. Some 7 per cent of private rented dwellings had some type of damp problem, compared with 5 per cent of social rented dwellings and just 2 per cent of owner-occupied homes. Cheap, background heat (produced from sustainable sources) could have a huge impact in tackling this.

The reason for this damp is private rented dwellings are, on average, older and more likely to have defects to the damp proof course, roof covering, gutters, or down pipes, which inevitably leads to problems with rising or penetrating damp affecting at least one room in the property. All of these are very fixable problems, with routine maintenance being a key element.

The energy efficiency of English housing overall continues to improve although the rate of improvement is slowing down. In 2018, the average SAP rating of English dwellings was 63 points (out of 100), up from 45 points in 1996. Improving this further will be vital if we are to deliver our commitments to address climate change.

Higher heating bills

In 2018, both owner-occupied and private rented stock had an average SAP rating of 62, while the social rented stock had an average SAP rating of 68. The social sector was more energy efficient in part due to wider use of wall insulation, but also because the social sector contains a higher proportion of flats, which have less exposed surface area (external walls and roofs).

The proportion of dwellings in the highest SAP energy efficiency rating (EER) bands A to C increased considerably between 2008 and 2018, from 9 per cent to 34 per cent. Over the same period, the proportion of dwellings in the lowest F and G bands fell from 14 per cent to 4 per cent. In 2018, the majority of dwellings (82 per cent) were in EER bands C or D, compared with 51 per cent in 2008. 

While the average SAP ratings were the same, the distribution across EER bands varied. In particular, there was a greater proportion of owner occupied homes in band D (52 per cent compared with 48 per cent of private rented sector dwellings). In the social sector, the majority of dwellings (56 per cent) were in EER bands A to C, compared with 33 per cent of private rented sector dwellings and 29 per cent of owner occupied dwellings, largely due to higher levels of investment by social landlords in their own stock.

Increasing investment

If we are to meet our ambitious targets for reducing Greenhouse gas emissions, there is a very strong case for increasing the investment in energy efficiency measures such as more ground and air-source heat pumps and increasing the insulation to our walls and roofs.

In 2018, the private rented sector and housing association homes had the lowest proportion of homes with central heating (85 and 89 per cent respectively); while owner-occupied (95 per cent) and local authority homes had the highest (96 per cent). 

Older, less energy efficient boiler types were also more prevalent in the private sector. In 2018, 15 per cent of owner-occupied homes and 10 per cent of private rented dwellings had a standard boiler (rather than more modern condensing ones), compared with 4 per cent of social sector dwellings,

In 2018, there were 24.2 million dwellings in England, including both occupied and vacant homes. Of these, 4.8 million (20 per cent) were privately rented. To deliver our climate change commitments ways need to be found to greatly increase investment – to improve the condition of the stock and the facilities enjoyed by tenants.

Tax breaks or subsidised loans are probably the best way to get private landlords on board, but the key is finding positive ways to change behaviours towards investment, while also encouraging technologies to save and store energy at home or on a neighbourhood level. It’s worth the effort and not being melodramatic about it, but the future of the planet is at stake.  

Patrick Mooney is editor of Housing Management and Maintenance magazine