Housing

Housing in Transition: Understanding the dynamics of tenure change

Christine Whitehead
Christine Whitehead
Chihiro Udagawa
Chihiro Udagawa
Peter Williams
Peter Williams
Connie Tang
Connie Tang

England, traditionally seen as a nation of homeowners, is experiencing significant change in the types of housing tenure in which people live. The first part of this report looks back at tenure change between 1993/94 and 2009/10, using the Government’s Survey of English Housing and its successor the English Housing Survey. This historical look breaks the data down by tenure, region, household type and income.

The second part projects trends forward to 2025, and it explores how tenure structures may develop under different economic scenarios. Here we report on the core findings based on two scenarios – a continuing weak economy and a cautiously slow economic expansion from the current low base.

Recommendations

  • The most immediate policy issues are associated with the growth of the private rented sector as mainstream housing
    provision: not only around rent levels, but also around security of tenure and housing quality, not least for families. For families
    in London, private renting is projected to become the dominant tenure within 10 years.
  • It is clear that if the economy remains weak there will be far more households in private renting, including more than one in
    three London households by 2025. The much higher rents in London’s private rented sector, especially for lower-income
    households, will impact on both wages and competitiveness as well as on the Housing Benefit bill. Growth and a better macroeconomic
    environment would give households a greater likelihood of housing choices.
  • Social renting still plays a key role for lower-income families, especially in London, with adverse consequences for the
    economy and competitiveness if the sector were to decline further.
  • Policy has tended to see social housing as a problem rather than a solution. But the evidence presented here reinforces
    the point that social housing still plays a mainstream role in the London economy. The tenure is a key factor in London’s
    competitive position, not least in relation to the capital’s very substantial service sector. Its role in the future will be very
    different, depending on how policy affects social provision and upon the state of the economy.
  •  In policy terms, we can no longer discuss home ownership as a single tenure – outright ownership and buying with a mortgage
    are two very different segments of the market. They meet quite different needs at different stages in people’s housing journeys.Mortgaged home-ownership has been falling, and in some scenarios becomes very much the minority tenure. Yet home
    ownership is what the majority of people aspire to, and is held to support the economic growth agenda. There are real policy
    choices about what to do – wait for an economic recovery or intervene to support increased entry? Low interest rates and flat
    prices may open up new possibilities.
  • The evidence suggests that the housing opportunities of lower- to middle-income households will become increasingly
    restricted, with ever greater numbers renting privately, putting a high premium on achieving significant improvements in the
    economy and credit availability.

Further reading

Building blocks
Assessing the role of planning reform in meeting the Government’s housing targets
·
Camron Aref-Adib, Jonathan Marshall, Cara Pacitti
Housing Outlook Q2 2024
·
Felicia Odamtten
Home truths
Putting housing policy in context for the 2024 general election
·
Camron Aref-Adib, Lindsay Judge, Felicia Odamtten, Cara Pacitti
Christine Whitehead
Christine Whitehead
Chihiro Udagawa
Chihiro Udagawa
Peter Williams
Peter Williams
Connie Tang
Connie Tang