Young people are most affected by the growth of the private rental sector. It is insecure. They are more separated from the community than in social housing. The quality of the private rental sector housing is inferior in general.
― The findings of this analysis paper are based on data in the Scottish Households Survey 2016, published by the Scottish Government at the end of September. This data provides fresh insight into the experience of living in housing in Scotland – this paper focuses on the private rented sector (PRS) in particular.
― Young people are the demographic most affected by the growth of PRS, with 40% of 16-34 year olds using PRS today compared to 13% in 1999. Young people face specific challenges in terms of low-incomes, insecure work and poverty. While poverty levels among young people for those in social housing has fallen, it has nearly tripled in PRS from 2005-15. Other demographic groups disproportionately represented in PRS include students and people of Asian descent.
― Private rent is uniquely insecure, with over two-thirds (68%) of people staying less than two years in one flat and 41% staying less than one year. The average PRS stay is 2.8 years, compared to 10.6 years in social housing, nearly five times longer. While it is too early to assess the effectiveness of new Scottish Government legislation to address security of tenure, further measures could be taken to make the power between landlords and tenants more balanced.
― Tenants in PRS accommodation are considerably more alienated from their community than in social housing. Only one in five (19%) PRS tenants had a very strong connection to their neighbourhood, compared to 33% in social housing. 40% in PRS felt they were not very or not at all connected to their neighbourhood, compared to 23% in social housing. Alienation has been linked to public health problems in Scotland. Increasing security of tenure and tackling gentrification – which acts to displace poorer people from their communities – could be part of addressing this issue.
― There is significant demand within PRS for moving to social housing. Approximately 40,000 people in PRS (11%) are on a social housing waiting list. Approximately 5,000 (12%) of that number have been on a waiting list for 10+ years. Nearly one-third (31%) of those are on the waiting list because they can’t afford their current housing, while 11% are on because they’ve been threatened with homelessness. These figures are an indication of the lack of affordability of PRS housing and the under-supply of social housing. The introduction of rent pressure zones is likely to have some effect in restricting future rent rises and tackling regional inequities, but is not necessarily going to reduce the number of PRS tenants finding rent unaffordable. A Dutch model of rent controls which links cost to quality of property and ensure affordability would be a step forward. The Scottish Government’s social housebuilding programme should be stepped up considerably.
― PRS has lower energy efficiency levels than social housing, with only one-third (34%) of homes meeting the Scottish Government’s band-C energy efficiency rating target. Poor energy efficiency is a major driver of fuel poverty, with the PRS sector being the highest contributor of emissions per home. One-third (33%) of PRS households are in fuel poverty. Over half (51%) of PRS properties still fail the Scottish Government’s Scottish Housing Quality Standard, which is mandatory for social housing. 5% of PRS homes fall below the Tolerable Standard, which is categorised as homes that it is not reasonable for a person to continue to live in, compared to 1% in social housing. Quality could be addressed by a system of rent controls which ties quality to cost, incentivising the landlord to improve the property.
― The value of the private rented sector to society as a whole should be reassessed by the Scottish Government, and consideration given to a long-term strategy to reverse the trend since devolution towards increasing privatisation of the rented sector. This could be done through a combination of strengthening and increasing the diversity of social housing so that it is once again a universal service and establishing a regulatory regime for PRS that puts it on at least a level playing field with social housing in terms of quality, affordability and security, restricting its profit-making capacity for landlords. The reversing of privatisation in Scotland’s rental market should be something for Scottish politicians to triumph not fear.