Increasing Reliance on Private Rented Sector

The private rented sector houses a diverse range of households, with a wide range of needs from their housing. It can provide flexibility for people with changing accommodation needs or who need to move house frequently for work reasons or such like. However, it can also lead to insecurity of tenure and has additional up-front costs as well as rents, which may be problematic for tenants at the lower end of the market (for example finding money for deposits/bond, providing several weeks’ rent in advance to secure a tenancy, or paying agency fees which may need to be paid each time a tenancy is renewed).

Privately rented housing is the fastest growing sector in the housing market. As well as being the only housing option available for those who cannot afford to buy their own home but are not in need of social housing assistance, it is now possible for local authorities in Wales to discharge their homelessness duties within the private sector.

The private rented sector accounts for about 18% of the housing stock across Conwy County Borough and Denbighshire – about 17,000 dwellings in total^[i]. This is well above the Welsh average of 15%. Conwy CB in particular has a high reliance on the private rented sector in its housing stock. The only areas in Wales with higher proportions of private rented housing are Cardiff and Ceredigion, which have large student populations and would therefore expect to see such a pattern.

[i] Dwelling estimates 2014/15, Welsh Government

The private rented sector has grown significantly over the last 25 years, growing from a total of about 9,500 dwellings in 1991 to an estimated 17,000 by 2015 – an increase of 79%.

The owner occupied housing sector has seen proportionately much slower growth (18%) in the same period. Social housing growth was more or less stagnant in the area, and has reduced nationally. News reports in August 2016 reported that home ownership is, nationally, at its lowest level for 30 years.

Growth in private rented sector, 1991-2015

Source: census of population, ONS

There are a number of reasons for the rapid growth of private renting, and a number of reasons for expecting it to continue: social change as people co-habit later in life and renting and house-sharing become ever more socially acceptable; high house prices and lack of availability of mortgage credit; the promotion and use of the sector by local authorities to house those in housing need or who are homeless; and, restricted access and long waiting lists for social housing. The pressure on the private rented sector as the housing market has slowed and house building rates have dropped has been particularly noticeable.

Alongside this the supply of private rented homes has been buoyed by the growth of the small scale buy-to-let landlord, with many using rental properties as an alternative to a pension fund.

Privately rented housing can be difficult to regulate, both in terms of compliance with housing standards and health and safety, and in terms of security of tenure and managing rent levels. The Housing (Wales) Act 2014 hopes to improve this situation by requiring all landlords with property in Wales to register with Rent Smart Wales and to either be licensed themselves if they’re ‘self-managing’ or use a licensed agent.