The North's PRS Part I: Counting the cost
The Week in Housing 14/04/23
This week I am thrilled to feature the first of two guest posts from the Northern Irish renters’ rights organisation Renter’s Voice. In recent weeks I have written about the new tenant politics, and Renters’ Voice is very much a part of this international movement. These two posts provide a fascinating analysis of the North’s PRS and the issues faced by tenants, as well as (next week) reflections on policy responses and much needed reform. A very sincere thanks to Renter’s Voice for this contribution to The Week in Housing.
The private rented sector in Northern Ireland has undergone significant growth and transformation in the past two decades. According to 2001 Census data, just 6.7% of households at the time were renting privately. The most recent 2021 Census data show that private renters now comprise 17.5% of all households in the North.
Average private rent here grew 9.5% between 2021 and 2022 - higher than any other UK region. As is the case south of the border and across GB, higher numbers of young people here are spending more time renting from private landlords as they find it difficult, if not impossible, to save a large enough deposit to get onto the property ladder. Some who are in a position to buy their first home are holding off due to rising house prices and interest rate hikes. The 2021 Census shows that there are around 25% fewer homeowners with mortgages than there were 20 years ago.
A recent article from Novara Media describes how, since the beginning of the pandemic, people are fleeing expensive cities such as London and Manchester and moving to more affordable Belfast and Derry (recently described by the Sunday Times as one of the “coolest postcodes” in which to live). This has resulted in bidding wars never before seen in the North. Average rent in Belfast during Q4 of 2022 was £862, up 10.6% from the same period in 2021.
Tenants in Northern Ireland also tend to move around less frequently than those in England, Scotland and Wales. In 2019/20 across the UK, 23% of private renters had lived in their accommodation for less than 12 months compared with 16% in NI. 28% of private tenants across the UK had lived in their current accommodation for five years or more, compared with 40% of private tenants in NI. As a general rule, tenants are less likely to be subject to steep rent increases within their existing tenancy than they are between tenancies; a 2019 survey of private landlords in the North found that 35% wanted to increase the rent for a new letting or tenancy, compared with just 26% of landlords who said they were planning to increase rents for their current tenant. This survey was conducted before the recent boom in property prices, which has been used to justify steep rent increases. This means that private tenants in Northern Ireland are more likely to have been in their current home for multiple years, and paying less rent than the current inflated market average.
However, over the past two years many landlords have taken advantage of high house prices and decided to sell up. Some tenants are now finding themselves searching for a new rental for the first time in years - in some cases, decades. A similar property in the same area and suitable for their needs is likely to set them back hundreds more pounds per month. The rental market is unrecognisable for these tenants, most of whom simply don’t have hundreds of pounds spare per month to spend on rent. In 2022, real weekly earnings here decreased by 4.5% - the largest annual decrease on record.
The outlook for the roughly 50% of private tenants in receipt of social security is also stark. The £20 weekly uplift to Universal Credit and relaxation of welfare conditionality during the pandemic was a welcome relief for many tenants - but this uplift was cut and conditionality has not only returned but intensified in the months since.
When many people are earning less and everyone is expected to pay much more for housing, increasing rates of homelessness are inevitable. 10,135 households were classified as statutorily homeless in 2021/22. Loss of rented accommodation is the third most common reason for households presenting as homeless to the Housing Executive. In 2020/21, 636 people presented as homeless due to the sale of their privately rented accommodation. In 2021/22, this figure increased by 117% to 1,380 presentations.
The Renters’ Voice Survey
We at Renters’ Voice wanted to see how private tenants in the North have experienced the cost of living crisis alongside the burgeoning affordability crisis in the PRS. We ran the same survey twice; once in October 2022 and again in February 2023. The results highlight many areas of concern, but there is also clear demand for transformative change.
In both our October 2022 and February 2023 surveys, around half of respondents said they spend at least 40% of their monthly income on rent. The proportion of respondents paying at least 50% increased slightly from 2022 to 2023. There are valid reasons to object to the ‘30% rule’ as a de-facto indicator of rental affordability. However, answers to other survey questions indicate that private tenants who spend this proportion of their income on rent are by necessity spending less money on other essentials, such as food, transport and bills.
2 out of 3 respondents said they currently cannot afford to cover the costs of all their household expenses. When asked to explain how they are prioritising their bills, unsurprisingly rent came out on top for around 80% of respondents. Groceries, electricity and heating followed. Landlords likely understand that most tenants will prioritise paying their rent over other expenses.
Almost 40% of tenants in both 2022 and 2023 told us that their landlord or letting agent had increased their rent for their current property since January 2022. Of these, 1 in 10 reported this happening more than once and 4% reported three increases since January 2022. One respondent reported paying £550 per month in 2021. By summer 2022, they were paying £750 for the same property. No upgrades or repairs were carried out during this period to justify the 36% increase. Most respondents said they were not in rent arrears, but, at the same time, over half believe that their current renting situation is unsustainable.
Money remains a persistent worry for tenants. In 2023, 90% of respondents said they were worried about their ability to pay their bills, including 44% who were extremely worried. In 2023, 50% said they didn’t have money worries during the pandemic but they now do, due to the cost of living crisis.
The stress and financial anxiety felt by many tenants is impacting on their physical and mental health. In 2022 and 2023, over half of respondents said their physical or mental health has been negatively impacted. A further 28% are worried that their health will begin to suffer if the cost of living crisis continues. Some people reported experiencing sleepless nights due to worrying about bills. One tenant started medication as a result of anxiety and depression and another reported a breakdown in their mental health. There is also a significant risk that mental health issues will have knock-on impacts on physical health. One person told us that the stress of the crisis has resulted in a flare-up of their chronic condition. Another said they can’t turn on the heating due to the price of oil and coal, meaning that their arthritis will flare up in the cold.
It’s likely that many people regardless of tenure will experience harmful physical and mental ill health as a result of the cost of living crisis. However, we believe that the risks to tenants are even greater due to the significant and growing issues that currently plague the PRS, including poor conditions, steep and frequent rent increases, as well as insecurity of tenure.
Next week, we’ll consider some solutions to improve affordability in NI’s private rented sector, including rent controls.
Renter’s Voice is looking for private tenants to raise their voice and campaign for meaningful change in the private rented sector. To find out information or to join the group, please contact rentersvoice@housingrights.org.uk.
Events & News
Clúid Housing have just announced this year’s Simon Brooke Essay Competition - details here. The next installment of the #SimonTalks series looks at low-rise, medium density housing, register for the webinar here. I’ll be speaking at an event entitled Thinking about Home: Alternative Perspectives on the Housing Crisis in Ireland, 5:30 - 7:30 pm, Tuesday 25th April at the Museum of Literature Ireland . On the 27th of April there will be two interesting critical geography seminars - one featuring Neil Gray (Editor of the book Rent and its Discontents) in Trinity and the other featuring Melissa Garcia Lamarca (one of the foremost researchers of housing financialization in Spain) in Maynooth - I’ll share further details when I have them and on my Twitter.
What I’m reading
An interesting short piece here on the ‘landlord exodus’ narrative in the English context and what the evidence tells us. Fiadh Tubirdy of CATU wrote an insightful piece on the history of tenant activism in Ireland recently in the Irish Examiner. Also on the topic of tenant activism, this RTE Brainstorm piece looks at Irish women in the Land War. And still on that topic, I strongly recommend listening to this fascinating interview with an NYC landlord who explains how the shifting political economy of housing has changed in ways that have decisive negative impacta for landlords (on the Odds Lotts podcast). Finally, the Law Commission have published a new report on CPOs.