1. South London private rented sector study ENHR PRS Workshop, 19/20 March 2013 Danny Friedman, Cobweb Consulting, and Nigel Sprigings, University of Glasgow

2. What we’ll cover …  Brief background and context  Main features of resident survey  Landlord engagement and observations on the PRS in the market including space standards, landlord activity, and the LHA rate  Conclusions

3. Background to study – 5 Boroughs SE London What is the capacity of the PRS to meet the housing requirements of households who would otherwise be accommodated in the social housing sector? Complement the desk top work in the SHMA by providing evidence and analysis of nature of PRS Evidence base for potential licensing action Enable boroughs to better target enforcement and procurement Door to door household survey, Landlord engagement Secondary data Stakeholder interviews

4. The resident survey Not a random sample: – Interviews filtered by lower quartile rents for non-HMOs – HMOs focus – R-t-B focus 1165 face-to-face i/vs achieved In 50 local areas Selected in consultation with officers, to reflect above criteria

5. Where we interviewed residents

6. Demographics 40% + have one or more children 28% are single adults 48% had 2 plus adults (with or without ch.) 51% under 34 Only 3% over 65 59% white; Black largest BAME group (13%) Below average ill / unhealthy Note substantial numbers of children – implications for rehousing if loss of tenancy

7. Employment, income and benefits 74% working (58% f/t, 16 % p/t) 44% have income below £20,800 pa (£400 pw) 73% earn under £31,200 pa (£600 pw) 27% earn over £31,200 43% on some form of benefits: CB and HB most common (24% on HB, 25% on CB) Most HB claims only covered part of rent An economically active but low income sector – by nature or by selection? New Rugg category ‘working poor’?

8. Affordability The higher the income, the lower the proportion spent on rent Up to an income of £1600 pm (£19,200 pa) households spend over half income on rent Over 100% - few, in arrears, NRPF?

9. Market entrance and security Entrance costs Agents fees – 27% (£285 average) Deposits – 69% (£974 average) Rent in advance – 44% (£971 average) Security 29% had lived in their home for under a year 31% had lived in their home for 1-2 years 26% had lived in their homes 2-5 years 12% over 5 years High entry prices but some degree of stability once in?

10. Condition, quality, management Quality – 70% favourable (5% poor) Condition – 68% favourable (5% poor) HHSRS Cat 1 Hazard: – 20% damp / mould – 10% cold / lack of heat Management – 70% favourable – Agents worse regarded than direct landlords 14% had experienced ASB in immediate environment HB claimants experienced worse management, quality and conditions Most landlords / properties are decent – or low expectations? But HB claimants worst affected

11. Houses in Multiple Occupation About 25% properties surveyed were HMOs 12% registerable 2 to 10 households per HMO 38% had all available rooms used as bedrooms (i.e. no l/r), compared to 15% of non HMOs 4% shared bedrooms with non hh member Better opinion of quality / condition than others Signs of pressure on space / income maximisation? Lower expectations? Changing markets for HMOs ?

12. Landlords’ viewpoints (1) Context 80 landlords and agents interviewed or surveyed by web Stock – 1 to 800 Most in business since 1989; some up to 30 years PRS Expanding in area But ‘getting harder to make money in London’ unless sub-dividing Lettings and markets Increase in overall number of lettings; but reduction in new lettings to HB / LHA claimants Only rooms not flats available at LHA levels– and HMO rooms to working households. But there are still LHA lettings Two broad rent / lettings policies in force: – No or low rent increases for good, long term tenants for good tenancies; reliable tenants valued and retained (even if on HB); implications for LHA rate setting? – High turnover, high rent young professionals market – increase rent on change of tenancy A business choice: high turnover young professionals v. steady state lower earners / LHA

13. Landlords’ viewpoints (2) Working with local authorities Some willingness, some barriers: – trust, – professionalism (e.g. speed of response, customer care / service) – possibility of agency and management service for smaller landlords Non-regulatory approaches to improving conditions rather than heavy-handed expansion of administrative reforms Negative views of licensing – but acceptance that there were poor quality operator Some preferred HB payments to tenants (issue about overpayments) View that LHA lettings no more likely to be disruptive than others Conclusion: minority willing to engage – worth seeking out

14. ‘It’s complicated’ – our conclusions Even within the lower end / LHA sub-sector there is a complex picture of need, supply, and demand The rise of the ‘working poor’ in the LHA / HB sector – high levels of partial HB – and perhaps sensitivity to further changes in regime (i.e. UC) – New Rugg category – needs recognition in policy terms The prevalence of children – And the impact of families ceasing to be able to access sub-sector Conditions perhaps aren’t as much as an issue as suspected – though worse in HB sub-sector The rise of the HMO and room lettings – possibly to more young professionals – space standards falling fast The persistence of the LHA market, but its liability to erosion – Sensitive to different political and economic scenarios Differential rent policies for different sorts of tenants – quick buck v steady stream Continuing opportunities for LAs to engage with the sub-sector to meet needs of lower income households – But need for trust and professionalism