Corporate and Housing Services Report Title: Private Rented Housing Stock Report Author: Jennifer Boag Date: July 2015 1 Private rented housing stock Recent information from the Council’s Register of Private Landlords shows that there has been a substantial increase in the number of privately rented properties in the Council area. Because of concern that the quality of the housing stock in the private rented sector is usually poorer than in the housing stock more generally,1 it was decided to use information held on the addresses of new build housing to identify those privately rented properties which have been built relatively recently. This report shows the results of the work carried out. Private rented housing stock Table 1 shows the change in the private rented housing stock from 2001 in the Falkirk Council area. While the data sources are not entirely comparable, this nonetheless shows the substantial increase in the private rented sector from a relatively small tenure in 2001, and even in 2010, to over 9% of the total stock in the Council area by 2015. There are about three times as many privately rented properties in the Falkirk Council area now than there were in 2001. This increase obviously has implications for many aspects of the Council’s Local Housing Strategy and how the Council plans to meet future housing need. Table 1: Private rented housing stock 2001-2015 % of total housing Year No stock 2001 2,152 3.4% 2010 2,523 3.6% 2011 4,995 7.3% 2015 6,593 9.1% Sources: 2001 and 2011 Censuses Crown Copyright; 2010 Falkirk Council all tenure database, 2015, Falkirk Council Register of Private Landlords This increase in the private rented sector is mirrored across Scotland and the UK. For example, the Census figures show that private renting in Scotland increased from 8.0% of all households in 2001 to 12.4% in 2011. Further comparisons across Scotland are made at the end of this report. This increase in private renting is due to a number of factors. Partly it is due to the increase in house prices which have priced some first time buyers out of the market - although this may be less true in Falkirk as average house prices in Falkirk are lower than in some other parts of Scotland.2 Lack of social rented property means that many people are therefore forced into the private rented market. 1 For example, the 2013 Scottish House Conditions Survey found that private rented properties (along with local authority owned properties) were much more likely to suffer from disrepair, both basic and extensive, than other tenure types. “Scottish House Conditions Survey 2013 - Key Findings” Table 41 http://www.gov.scot/Resource/0046/00465627.pdf 2 Registers of Scotland report “10-year Property Market Report 2005-2015” shows that the average price of a house in Falkirk in 2014/15 was £126,665 compared to a Scottish average of £167,396 and that prices in the ten years from 2005 increased by 24% in Falkirk compared to 35% across Scotland. https://www.ros.gov.uk/__data/assets/pdf_file/0011/18668/RoS_10_Year_PM_report.pdf 2 It is also partly due to the recession when some house owners were unable to sell their properties when they wanted to move and so rented out their former home until the market improved. It has also been driven by the increase in availability of buy-to-let mortgages so that people have chosen to become private landlords as a means of investment. Recent figures from the Council of Mortgage Lenders show that in the last year over 205,000 buy-to-let mortgages were issued, up from 172,000 in the previous year. Analysis of the 2015 data on properties listed on the Council’s Register of Private Landlords compared to the data on the 2010 tenure database shows the change in private renting in the six housing market sub areas across the Council. Table 2: Private rented houses by housing market sub-area change 2010-2015 No or properties Change Sub area 2010 2015 No % Bo'ness 259 713 + 454 + 175% Denny/Bonnybridge 179 765 + 586 + 327% Falkirk 1,271 2,612 + 1,341 + 106% Grangemouth 261 741 + 480 + 184% Polmont/Rural South 200 763 + 563 + 282% Stenhousemuir/Larbert/Rural North 353 999 + 646 + 183% Total 2,523 6,593 + 4,070 + 161% Source: Falkirk Council tenure database (2010), Falkirk Council Register of Private Landlords (2015) Table 3: Private rented houses by housing market sub area % of stock 2010-2015 2010 2015 Sub area No % of total No % of total Bo'ness 259 3.6% 713 9.9% Denny/Bonnybridge 179 1.6% 765 6.6% Falkirk 1,271 6.7% 2,612 13.5% Grangemouth 261 3.0% 741 8.4% Polmont/Rural South 200 1.6% 763 5.8% Stenhousemuir/Larbert/Rural North 353 3.1% 999 8.4% Total 2,523 3.6% 6,593 9.1% Source: Falkirk Council tenure database (2010), Falkirk Council Register of Private Landlords (2015) Tables 2 and 3 show the growth in private renting by housing market sub-area. Falkirk has the largest number and percentage of privately rented properties, now over one in eight of all houses in Falkirk are private rented. However, growth in private renting has been strongest in the areas which had least private renting in 2010 - Denny/Bonnybridge and Polmont and Rural South. While the majority of properties which were private rented in 2010 remained private rented in 2015, some 416 did not. Table 4 shows the change by housing market sub- area. 3 Table 4: Private rented houses by housing market sub area losses and gains 2010- 2015 In 2010 In 2010 Total In 2015 Total Sub area only and 2015 2010 only 2015 Bo'ness 48 211 259 502 713 Denny/Bonnybridge 41 138 179 627 765 Falkirk 180 1,091 1,271 1,521 2,612 Grangemouth 40 221 261 520 741 Polmont/Rural South 52 158 200 605 763 Stenhousemuir/Larbert/Rural North 65 288 353 711 999 Total 416 2,107 2,523 4,486 6,593 Source: Falkirk Council tenure database (2010), Falkirk Council Register of Private Landlords (2015) House condition In order to identify those privately rented properties which might be considered to be in good condition, an exercise was undertaken to compare the list of properties on the Council’s tenure database (2010) and the Register of Private Landlords (2015) with the list of addresses of new build developments held by the Council’s Research and Information Team and developed for a different purpose. This identifies all housing developments of four or more properties completed since around 1990, i.e. the great majority of new build in the last 25 years. It is assumed that all properties completed within that time period will meet the most recent building standards and that their condition will remain good. Some of these properties will have been completed before 1990 but were on sites where the site completion was on or after 1990. The new build list contains some 16,055 properties making new build houses completed in the last 25 years 22.3% of the total housing stock. Of these, 20.8% were flats and 79.2% were houses (terraced, semi-detached or detached). Table 5: New build since 1990 by housing market sub-area % of total % of housing Sub area No. new build stock Bo'ness 972 6.1% 13.4% Denny/Bonnybridge 2,523 15.7% 21.8% Falkirk 4,050 25.2% 21.0% Grangemouth 744 4.6% 8.4% Polmont/Rural South 3,592 22.3% 27.4% Stenhousemuir/Larbert/Rural North 4,174 26.0% 34.9% Total 16,055 100% 22.3% Source: Falkirk Council Research & Information Team Of the total of 7,009 properties which were private rented in either 2010 or 2015 or both, some 1,975 were constructed in the last 25 years - 28.2%. Of those privately rented in 2015 1,890, or 28.7%, were built since 1990, a slight increase over the 2010 percentage. 4 Table 6: Private rented houses by housing market sub area and whether new build 2010 2015 No. New build No. New build Sub area rented No % rented No % Bo'ness 259 37 14.3% 713 150 21.0% Denny/Bonnybridge 179 35 19.6% 765 194 25.4% Falkirk 1,271 403 31.7% 2,612 833 31.9% Grangemouth 261 15 5.7% 741 55 7.4% Polmont/Rural South 200 49 24.5% 763 222 29.1% Stenhousemuir/Larbert/Rural North 353 141 39.9% 999 436 43.6% Total 2,523 680 27.0% 6,593 1,890 28.7% Source: Falkirk Council Research & Information Team The percentage of the private rented houses in the sub areas which are new build is generally related to the percentage of all the housing stock is new build. So Grangemouth which has a low number of new build houses has a low percentage of private rented properties which are new build, while Stenhousemuir/Larbert and Rural North has a high percentage of new build overall and of private rented new build. On the other hand, 11.8% of all houses completed since 1990 are currently privately rented, a slightly higher percentage than the percentage of all houses which are privately rented - 9.1%. Table 7 shows this broken down by the housing market sub areas. The highest percentage of new build which is privately rented is in Falkirk. Table 7: New build since 1990 by housing market sub-area & whether privately rented No of new Privately rented Sub area build No % Bo'ness 972 150 15.4% Denny/Bonnybridge 2,523 194 7.7% Falkirk 4,050 833 20.6% Grangemouth 744 55 7.4% Polmont/Rural South 3,592 222 6.2% Stenhousemuir/Larbert/Rural North 4,174 436 10.4% Total 16,055 1,890 11.8% Source: Falkirk Council Research & Information Team One interesting aspect of the relationship between new build properties and private renting is the proportion of newly built flats which are rented compared to houses.