vulnerabilities in a recovering market: experiences of low income tenants in the prs enhr private...
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Vulnerabilities in a Recovering Market: Experiences of Low Income Tenants in the PRS
ENHR Private Rented Markets Seminar20th March 2015
Vulnerabilities in a Recovering Market:
The Experiences of Low Income Tenants in the PRS
Caroline Kelleher, DKM Economic Consultants
Trends in Private Renting Low Income Tenants in Ireland This Research Paper Primary Data Results Issues to Consider
Contents of Presentation
Trends in Private Renting Financial downturn
Risks of homeownership
Cost of house purchase
Demographics
Lifestyle choice
Trends in Private Renting Inability to sell - increase in properties for rent
Postponement of house purchase
Shift in social housing policy
Demographic and social changes
Lack of rented accommodation - rent burden Focus Ireland - 40 families a month become homeless Landlords do not wish to rent to social assistance
tenants◦ Housing Assistance Payment (HAP) ◦ Employment Equality (Amendment) (No 2) Bill
Low Income Tenants In Ireland
Views of low income tenants renting in Ireland Comparisons other tenant groups Key Issues include:
◦ Reasons for Renting◦ Sourcing Rented Accommodation ◦ Satisfaction with Renting◦ Rent Burden◦ Views on issues in the sector
This Paper
Tenant survey -major review of the PRS in Ireland
Online interviews
Fieldwork - May 2014
Sample of 500 tenants
Primary Data
Low Income Tenants – 260 respondents◦ Rent Supplement or Rental Accommodation Scheme
(54%)◦ Unemployed◦ Social class comprised category (C2, D, E )
Other tenants -201 respondents Students were excluded
Tenant Groups
Tenant ProfileLow
IncomeOther
s
Male** 50.4% 59.7%
Female** 49.6% 40.3%
Republic of Ireland ** 66.9% 75.6%
UK (incl Northern Ireland) 8.5% 6.0%
Other Europe** 19.4% 10.9%
Rest of World 5.2% 7.5%
Negligible differences between the groups across the Marital Statuses and Age Profile
Females and Other Europeans were statistically more likely to fall into the low income tenant group
Reasons for Renting
More freedom of choice among other renters
Low income tenants may have few options outside of the PRS
Low Income
Others
Suits my requirements best * 29.4% 36.8%
Can't get a mortgage - don't have the deposit saved/ savings to purchase
29.8% 36.3%
Can't get a mortgage - not earning enough or job is unstable/ on contract**
33.1% 23.9%
Not sure where I want to settle down/ live long term ***
16.9% 27.4%
Convenient to things I need to be close to (e.g. work, school, family)*
15.7% 21.9%
Feel I am too young to buy a property** 8.1% 14.9%
Can't find a suitable property to buy 10.1% 10.4%
Waiting to be offered social housing (local authority or voluntary body)***
14.9% 1.0%
Only in the area for a limited time i.e. college, job contract etc **
3.2% 8.0%
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Sourcing Accommodation Low
IncomeOther
s
Did you sign a lease when moving in?* 82.7% 76.1%
Do you have a copy of the lease? *** 90.7% 99.3%
Were you required to provide references from previous tenancies or employers? ** 48.4% 57.7%
Do you have a rent book or do you receive a quarterly rent receipt from the landlord? **
27.4% 19.4%
Were you required to provide a security deposit to your landlord?
89.1% 91.0%
Did the landlord/agent carry out an inventory on the property prior to you moving in?
41.9% 41.8%
‘Very difficult to source accommodation at present’.
Unprecedented lack of rental stock in Ireland
More onerous requirements for Low Income tenants?
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Satisfaction with Rented PropertyOverall satisfaction levels were highLower levels of satisfaction evident among low income tenants Low
IncomeOthers
The condition of the property ** 43.5% 53.7%
How safe your property is *** 47.2% 60.2%
Your landlord*** 47.6% 64.7%
The security of your rental situation * 39.5% 47.8%
The location of the property*** 58.5% 75.6%
The rent that you pay relative to the property 35.1% 38.8%
Could suggest poorer standard of accommodation
May link back to:obtaining copies of the leasetenancy inspectionsrepairs and maintenance
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Rent Affordability
Rent Supplement ◦ 47% Rent Burden 30%+◦ 15% - Rent Burden 50%+
Other Low Income Tenants (ex RS)◦ 60% - Rent Burden 30%+◦ 20% - Rent Burden 50%+
Low Income
Others
30% or less *** 45.2% 62.7%
31-50% 35.9% 31.3%
50+% *** 17.7% 4.5%
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Other Key Findings
Low Income Others
Lack of supply was driving rent increases** 52.6% 62.9%
More likely to rent long term if there was a possibility of a long term lease** 35.1% 23.9%
Happy to rent long term* 18.1% 12.4%
Not fully aware of their rights*** 38.3% 26.4%
Majority of all tenants agreed that:◦ the lack of supply was driving rent increases, ◦ the government should incentivise the supply of
accommodation◦ that rent increases should be regulated
Issues to Consider Rent affordability and supply of accommodation Housing market pressure is increasing
◦ Buy to Let (BTL) investors exiting the sector; ◦ New Central Bank of Ireland rules on mortgage lending
Further rent increases◦ Significant for rent supplement tenants ◦ Need for greater supports for the intermediate tenant
market Potential for long term renting, PRS needs to become more of a policy focus
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