Can anyone make sense of this chart?

westernpromise

http://visual.ons.gov.uk/uk-perspectives-housing-and-home-ownership-in-the-uk/

...which is an analysis of home occupation by tenure from 1980 to 2012.

So about 3/4 of the way down, we have a chart which shows the split between Owner Occupied, Rented privately, Rented from housing associations, and Rented from local authorities since 1980.

Some points jump out of this for me. First, the total number of dwellings rented from the council is the most marked downtrend, falling from 6.7 million dwellings to 2.2 over the period. The 4.5 million dwellings lost in that sector have been replaced by a rise over the same period in rented privately (up from 2.5 to 4.9 million), amd housing associations (from 0.4 to 2.7). Taken together, these show that constructively, private and HA rentals have simply replaced council rental. The total of all 3 in 1980 was 9.5 million and in 2012 it was 9.8 million, so at most, there are 300,000 more rental dwellings than in 1980.

Since that date, however, the overall number of dwellings has risen, from 21.4 to 27.7. Net, pretty much the entirety of this gain has been in the owner occupied sector. The overall percentage of renting hasn't actualy altered to any meaningful extent - yes there are 300k more households renting but then there are 6.3 million more households.

Based on this I struggle to understand what the supposed effect of the PRS sector is supposed to have been. It's simply replaces what was already there.

I also struggle to understand which year in the past the usual crash troll suspects consider was nirvana?

princeofpounds

Your question is totally unclear. The effect of the PRS on what, exactly?


Assuming you mean prices, the data you show is an interesting part of the story but in itself doesn't mean much. The price of Old Master paintings has shot up and swung around over the years despite ownership changing between aristocratic widows, Russian oligarchs and American museums.

always_sunny

charts in isolations can be read in so many ways that are basically useless...

westernpromise

princeofpounds wrote: »

Your question is totally unclear. The effect of the PRS on what, exactly?

Well, just generally really. I don't see anything in here to support the idea that there's more renting than ever before, which is an often-made assertion by crash trolls. The aggregate number of rental households 3 years ago was, pretty much, the same as the number 36 years ago. It's a sector that has been static in size at the same time as the overall number of households has gone up by 30%.

Any inflationary effect on price caused by PRS landlords buying rental property seems likely to me to have been completely cancelled out by the local authority sector selling such property or transferring it to HAs. If you wanted an explanation of high house prices, the steady increase in the total number of households seems to me to provide a complete answer.

But if any our resident crashtrolls happens along, I'd be very interested in their views of which year in that graph showed the desirable state to which we should try to return.

One of the tropes of the landlord-envying brigade is that buying to let creates no new homes. It is pretty clear from that page that this cannot be so. The individual year in which prices rose the most was 1988, which predates BTL. The year in which they fell the most was 2009, which postdates BTL. The study notes elsewhere that

The overall level of house building in the UK has declined since 1980, with 140,880 houses built in financial year 2013/14 – a fall of more than 44% from the 251,820 built in 1979/80.

Since new home supply is running well behind new demand, it seems clear that without landlords' initiatives to create HMOs, things would today be very much worse.

The fact that landlords are to Osborne persona non grata thus bodes very well for rents among what stock is left in the sector; nobody's building enough and he's making it worse.

cells

You should combine the figures for council and HA as one figure. Often whole estates with hundreds of flats were just transfered to HAs.

So if the figures are correct the social stock (council+HAs) went from 6.7 million to 4.9 million. The difference of 1.8 million must have been mostly right to buys.

Also the rental sector has grown a lot since 2012. One document I read says last year (2015) 440,000 was added to the stock.


The high point in ownership was around 2005 and if the crash wishers want to return to high ownership levels we need to go back twards the regulations and practises that were in place during that time. That is to say we need a return of 100% mortgages, a return of interest only and a return of self cert. Without those I feel the owner household pool will shrink by 3-5 million homes to become rentals

cells

westernpromise wrote: »

Since new home supply is running well behind new demand, it seems clear that without landlords' initiatives to create HMOs, things would today be very much worse.

in some towns and areas there are terrace homes with lend themselves well to being converted to 6 bed HMOs with good sized rooms. In those areas landlords that converted those terraces to HMOs added a lot to supply. A terrace which was home to 2.4 persons on average becomes a terrace home to 6. Each HMO conversion thus added to supply the equivalent of 1 new build or even a little over 1.

It is probably one of the most hated parts of the rental market but without it like you say rents and prices would likely be even higher

chewmylegoff

The chart means: buy silver and buy property in Wood Green. If you can combine the two and buy a silver house in Wood Green then you have really hit the jackpot.

westernpromise

Is there a way to short Aberdeen?

chewmylegoff

I find the best way to short aberdeen is to buy another house in wood green.

ging84

You are looking back too far
the 80s were grim, the 70s were very grim, no big surprise that things are better than they were in 1980

The graph shows owner occupied clearly peaks at around 2006 and has been in decline since, and the amount of private rented started to shoot up from about 2005
Only goes up to 2012 so not clear if things have since improved or not which is a shame.

Basically if you cut off that graph from about 2002 back so you are only look at the most recent 10 years it tells a very different story than looking over the full 32 years.

westernpromise

But the more you cut off, the less representative it is. Why should what has happened in the last 10 years be taken to be the norm?