Why It Matters
Average Tenure
Summary
We have measured the probablility of the type of tenure a resident in a selected postcode may have, and . These are categorised into:
- Outright Ownership
- Ownership with Mortgage
- Renting from Local Authority
- Renting from Private Landlord
Definition
| Dataset | Explanation |
|---|---|
| Postcode probablility of outright ownership | Shows the likelihood of owning a home outright in the selected postcode, expressed as a number between 0 and 1. |
| Postcode probablility of owning a house through mortgage | Shows the likelihood of owning a home with a mortgage in the selected postcode, expressed as a number between 0 and 1. |
| Postcode probability of renting from Local Authority | Shows the likelihood of renting from a Local Authority in the selected postcode, expressed as a number between 0 and 1. |
| Postcode probability of renting from private landlord | Shows the likelihood of renting from a private landlord in the selected postcode, expressed as a number between 0 and 1. |
| Postal sector probablility of outright ownership | Shows the likelihood of owning a home outright in the selected postal sector, expressed as a number between 0 and 1. |
| Postal sector probablility of owning a house through mortgage | Shows the likelihood of owning a home with a mortgage in the selected postal sector, expressed as a number between 0 and 1. |
| Postal sector probability of renting from Local Authority | Shows the likelihood of renting from a Local Authority in the selected postal sector, expressed as a number between 0 and 1. |
| Postal sector probability of renting from private landlord | Shows the likelihood of renting from a private landlord in the selected postal sector, expressed as a number between 0 and 1. |
| London-wide expected value of outright ownership | Shows the likelihood of owning a home outright in London as a whole, expressed as a number between 0 and 1. |
| London-wide expected value of owning a house through mortgage | Shows the likelihood of owning a home with a mortgage in London as a whole, expressed as a number between 0 and 1. |
| London-wide expected value of renting from Local Authority | Shows the likelihood of renting from a Local Authority in London as a whole, expressed as a number between 0 and 1. |
| London-wide expected value of renting from private landlord | Shows the likelihood of renting from a private landlord in London as a whole, expressed as a number between 0 and 1. |
Why the metric matters from commercial inhabitant’s perspective?
For a commercial inhabitant it is handy to understand the tyes of tenure your prospective customer base may have. Having a high number of rented properties nearby may indicate the possibility that potential customers would be more likely to move on after their rental tenure is up and therefor it may be hard to ingratiate yourself within a steady community.
A higher proportion of those in socially rented accommodation would mean that the community would likely be more robust and would be there for much longer as social tenants tend to remain in their home for a greater period of tenure than private renters. However it may also mean that community-based shops are already present in the area as many social housing schemes were constructed with shopping space included in the design, and it will also imply a greater likelihood that local prospective customers would be of a lower income. There is also a higher chance that development will take place in areas with high levels of social housing.
Those who own their homes either outright or with a mortgage will again likely be around for a long time, giving you a secure customer base. Particularly places with lots of outright ownership, but mortgage based ownership too, will indicate a higher income community and therefore commercial inhabitants may wish to cater to that demographic.
Why the metric matters from the residential inhabitant’s perspective?
Residential inhabitants would mainly be interested in the types of tenure around them so that they can get an idea of what tenures of housing would be available to them were they to move there. The more of one would suggest a higher likelihood that that would be the most likely tenure on offer in that selected postcode or wider area.
It would also indicate the likely income level of the local area in much the same way it would for the commercial inhabitant, and therefore would perhaps provide some insight into the potential house prices in the area, though we have more accurate metrics to predict that.
For potential investors or those looking to buy to let this may also prove of interest if there are a lot of owned homes amongst a large amount of privately rented properties.
General Commentary
London has the lowest level of home ownership, and the highest levels of both social and privately rented properties of any region in the country, as well as the lowest length of tenure, with almost 30% of private renters having lived in their homes for less than a year at any one time. On the other hand, around 25% of the city’s social housing tenants have lived in their property for between 10 and 19 years, which is on par with the rest of the country, the median UK social tenancy length being about 12 years.
Over the past 30 years the percentage of London households that are owned outright have steadily increased (about 5%) to make up just under 25% of the total housing stock, while those owned with a mortgage have fallen sharply by around 15% to contribute about 25% of total housing. At the same time the proportion of privately rented properties has increased by 20% to make up almost 30% of the total, and social housing has fallen by just under 15% to now make up just over 20% of the total stock.
These shifts are dramatic, but what is even more apparent is how this breaks down by age. In the last 30 years rates of owner ship have fallen amongst all age categories other than in the over 65s, for whom it has increased from 50% to 70%. For 55-64 year-olds it remains the same, on about 60%, but has fallen since its peak of almost 75% in 2005. Those in the 45-54 category have seen a slide from around 75% to 55%, 35-44s have fallen from about 70% ownership to 45%, and 25-34s have seen the biggest from off from almost 60% to below 30%, even with a slight bump from help to buy schemes for first time buyers. Even those between 16 and 24 have seen a fall, from about 25% ownership to about 5%.
Trivia
Around the time of the First World War, only 10% of the country’s population owned their home, while 90% rented privately.
By 1979, 42% of homes in the UK were socially rented, whereas today the figure only stands at 8%!
History
Throughout much of urban history, housing supply has been the domain either of the individual or the landowner, the latter of whom would either organise the building of homes and charge rent on the property, or allow the individual to build a home on their land and charge rent on the ground it was built on. The lack of building codes at the time meant this housing was often of poor standard.
As the Industrial Revolution arrived, mass migration to London forced a need for a rapid supply of housing. Landowners or landlords built and purchased a huge amount of houses in the early-to-mid-19th century, and it wasn’t long before more than 90% of the country’s residents were renting their homes. Slums quickly developed as private builders looked to profit off desperate Londoners priced out of other areas or arriving in the city for the first time. The Local Government Act of 1858 stipulated terraced streets must be 11m wide and all houses must have a garden of 14 square metres.
Around this time Housing Associations such as Peabody and Guinness also emerged as philanthropic organisations to provide affordable housing for the growing lower and lower-middle classes, while the first social housing projects were being created in the form of Tower Hamlets council’s Boundary Estate and Westminster’s Millbank Estate.
In 1918 the Tudor Walters Report set out standards for social housing and in 1919 the Housing and Town Planning Act, or the Addison Act, was implemented by the government of David Lloyd George to house Britain’s ‘heroes’ following the First World War. These acts expanded government-built housing controlled by the LCC, growing the country’s housing stock from 7.5 million in 1911 to 11.3 million by 1939, and buying up existing stock and renting it socially. Well-built, spacious and sanitary flats with indoor bathrooms and running water were built in estates in urban centres in place of slums, and the suburbs saw the growth of the quintessential three-bed semi.
After the Second World War and the Blitz, which had destroyed more than 500,000 homes, housing was in a terrible shortage, as were those to build and design it. Housing became a priority in election campaigns as a matter of public health. Millions of homes were completed over the next decade and into the 1950s high rise architecture became fashionable and a good way of housing many in a small area. 500,000 new homes were added to London by the ’60s in the form of high density blocks.