Why It Matters Tenure
Summary
We have broken down the residential stock of your neighbourhood based on their tenure type.
Interpretation
| Dataset | Explanation |
|---|---|
| Total Number of Dwellings | This is the total number of residential properties in a postcode. |
| Total Number of Dwellings that are Owned | This is the total number of residential properties in a postcode that are owned regardless of whether they are mortgaged or owned outright. |
| Percentage of Dwellings Owned Outright | This is the percentage of all dwellings that are owned outright. |
| Percentage of Dwellings Owned with a Mortgage or Loan | This is the percentage of all dwellings that are owned with a mortgage or loan. |
| Total Number of Dwellings Under Shared Ownership | This is the total number of residential properties in a postcode that are under shared ownership. |
| Total Number of Dwellings that are Socially-Rented | This is the total number of residential properties in a postcode that are socially-rented. |
| Percentage of Dwellings Socially Rented from a Council or Local Authority | This is the percentage of all dwellings that are socially rented from a council or local authority. |
| Percentage of Dwellings Socially Rented from Other Agents | This is the percentage of all dwellings that are socially rented from other agents. |
| Total Number of Dwellings that are Privately Rented | This is the total number of residential properties in a postcode that are privately rented. |
| Percentage of Dwellings Privately Rented from a Landlord or Letting Agency | This is the percentage of all dwellings that are privately rented from a landlord or letting agency. |
| Percentage of Dwellings Privately Rented Through Other Means | This is the percentage of all dwellings that are privately rented through other means. |
| Total Number of Dwellings Where Tenants Live Rent Free | This is the total number of residential properties in a postcode where tenants live rent free. |
Why the metric matters from a commercial inhabitant’s perspective
Businesses will be interested to know whether a neighbourhood’s residents are predominantly homeowners, private tenants or social housing tenants, because this will indicate how much disposable income locals have. Social housing tenants tend to have the least disposable income, so the sale of high-end goods and services will not flourish in such an area.
Further longer-term goods and services will sell better in an area of homeowners such as higher quality products which require periodic servicing, such as traditional suites of furniture which require reupholstering or cars owned outright.
Why the metric matters from a residential inhabitant’s perspective
Residents may be interested to know the proportion of their neighbourhood who are homeowners, private tenants or local authority tenants. Studies have shown that homeowners are likely to invest more in their local communities than renters because they see themselves being in the area longer term, so there can be more of a sense of civic pride and community in an area with a higher proportion of homeowners.
Historically, it was thought that the higher the proportion of home-owners the lower the rate of crime, but this is more likely to be due to other social factors that are common amongst renters, than as a result of the type of person who takes up such a form of tenure because countries which do not have high proportions of home ownership, such as Switzerland, do not experience higher crime rates.
General commentary
Presently the most common type of tenure for Londoners is owned with a mortgage, as experienced by 29% of Londoner. This is followed by privately rented tenures, at 27%, with owned outright at 22%. The least common type of tenure is social housing a 21%. London also has a high degree of home ownership vis à vis other global cities. However, scratch the surface, and the age at which Londoners are likely to own their own home rose enormously in the last two decades, whereas the majority of Londoners aged 24 to 34 owned their own home in the 1990s, this has now become far rarer whilst 72% of those who are 65 and over own their home.
Sharing privately rented homes with other individuals or couples has also become far more commonplace in London in the last two decades, especially when compared with the rest of England and Wales where it is still unusual, with only 6% of households living in this form of arrangement.
By 2025 it is expected that 60% of Londoners will rent their home privately. This is considered to be a product of rising house prices and limited stock of affordable housing in London. It is predicted that this shortfall will be met by institutional investors buying up developments, and letting them on bases which are more tenant focussed than the current offerings and are better adapted to meet the needs of families.
Contrary to media stories, the overwhelming majority of new arrivals to London are accommodated in its private rented sector, including 85% of those coming from overseas, which is also the source of nearly half of London’s construction workforce.
(Photograph: propertyreporter.co.uk)
Trivia
Households in the private rental sector in London spend on average 45% of their income on rent. This figure falls to 32% nationwide.
History
In the 1920s, 80% of Britons rented from a private landlord. Home building initiatives which were commenced following the First World War meant that local authorities were tasked with providing homes for their constituents. This changed the tenure mix of London significantly as it meant more people were now renting from the local authority and more owned their own homes. Home ownership rose in the twentieth century, to reach a peak of 38% in 2000.
London’s tenure mix changed dramatically in the first decade of the twenty-first century; the proportion of households that own their home with a mortgage fell nine percentage points to 29% in 2011, while the proportion that rent privately rose from 15 to 25 percent. By 2017, 22% of households in London owned their home outright, 29% had a mortgage, 27% rented privately and 21% were in social housing. This is only the second time since 1981 that social tenants were the smallest tenure group, after being the largest tenure group in the early 1980s.
Home ownership rates among younger Londoners have fallen sharply in recent decades. While London’s overall home ownership rate has fallen in recent decades, there are stark differences in the trends for different age groups. In 1990, 1 in 4 Londoners aged 16-24 owned their own home and nearly six in ten London households were headed by someone aged 25-34. However, by 2017 these figures had fallen to just 8% and 28% respectively. Home ownership rates also fell for households headed by someone aged 35 to 44 (from 69% to 49%) and 45 to 54 (71% to 52%) over the same period. During this period, the ownership rate for households headed by someone aged 55-64 initially rose, but over the last decade has fallen back to its original level at 63%. Finally, the proportion of households headed by someone 65 or older that owned their own home rose relatively steadily from 49% in 1990 to 72% in 2017. Resultantly, homeownership became a privilege delayed later in life for Londoners.
Flat-sharing is also a phenomenon that has increased sharply in London, especially inner London. Since the early 1990s, the number of people in London living in a shared private rented home has grown rapidly.
In 1985, around 5% of people flat sharing as an individual or couple in London were living in a private rented home. As home ownership was more prevalent, having lodgers in a home which was owned by one of the sharers was more commonplace. In the early 1990s, when there was rapid growth in house and flat sharing such that by 2017, 16% of all flat sharers in London were living in shared private rented accommodation.
There was a wide divergence within London, from 11% in outer London to 23% in inner London. In the UK as a whole, only 6% of couples and individuals sharing a property shared private rented accommodation in 2017, up from 2.5 percent in 1985.