Searching for generation rent Identifying niches in the

Searching for 'generation rent': Identifying niches in the private rented sector Ben Pattison Housing and Communities Research Group 9 th April 2015

Summary o Can we find ‘generation rent’ in the PRS? o Niches or sub-markets within the PRS o Difficulties with identifying niches o Birmingham as a case study o Niches operating within the PRS in the city o 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 o But does this fit with what we know about the private rented sector (PRS)? o – “a sector that defies sweeping generalizations” (Aalbers & Christophers, 2014) – consists of different sub-markets or ‘niches’ (Rugg & Rhodes, 2008) o Can we find ‘generation rent’ in the PRS?

Niches in the PRS o Taken from the review of their PRS in 2008: “demand supply characteristics, distinctive rental practices and – in some cases – specific types of central policy intervention that shape the way the submarket operates” (Rugg & Rhodes, 2008: xiv). o Provides a framework to understand the diversity of the PRS o A (non-exhaustive) list of niches

Rugg/Rhodes PRS niches o o o 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 o 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 o Particular issues with Housing Benefit niche (e. g. Blackpool). o Is there a ‘generation rent’ niche?

Birmingham case study o Use a case study approach to identify niches within one housing market o Provide a starting point to investigate diversity of housing circumstances in the PRS o Why Birmingham? – Largest local authority in the country – Should contain a range of niches – Access to Housing Benefit data

Investigating niches in Birmingham o Define a niche as a distinctive spatial configuration of tenants, landlords and stock within the private rented sector o Methodology: – Geodemographic analysis of census data for household and stock at output area level – Housing Benefit data (April 2011) then added at ward level o 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 Source: Author’s calculation based on 2001 and 2011 censuses

Housing Benefit (HB) within Birmingham o HB claimants accounted for: – 38% of PRS in April 2011 – 40 to 55% of growth of PRS in the city between 2001 and 2011 o 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 o City Centre Living (spatially defined, PRS dominant, low HB, new build flats) o Students Around Campus (spatially defined, PRS dominant, low HB, HMO) o Young Professionals (spatially defined, PRS above average, low HB, mixed stock) o Housing Benefit Dominant (PRS above average, HB = 90%+ of PRS, terraces) o City Centre Fringe (PRS around average, moderate HB, terraced stock) o Suburban Diffuse (lower than average PRS, moderate HB, mixed stock)

City Centre Living Students around Campus Young Professionals HB Dominant City Centre Fringe Suburban Diffuse Dominant private rented sector niche in each ward, Birmingham, April 2011

Key findings o The PRS in Birmingham is very diverse o Diversity consists of both households and stock (potentially also landlords) o Several niches are highly spatially defined o 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 o Simple ‘generation rent’ narratives are challenged by diversity of private rented sector o Appears that younger households have diverse housing circumstances (and pathways? ) within the PRS o 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? o Relationship between capital and housing pathways in Amsterdam o “young people make use of various forms of capital to gain access to specific sections of the housing market” o “Young households can either follow a chaotic pathway deliberately and relatively successfully or become trapped in a chaotic pathway” (Hochstenbach & Boterman, 2014)

Any questions? o Contact details – BMP 248@bham. ac. uk – @bmpattison

References Aalbers, 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-newgeneration-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