ENHR Private Rented Markets Seminar
20th March 2015
Vulnerabilities in a Recovering Market:
Experiences of Low Income Tenants in the PRS
Caroline Kelleher, DKM Economic Consultants
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Trends in Private Renting
Low Income Tenants in Ireland
This Research Paper
Primary Data
Results
Issues to Consider
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Financial downturn
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Risks of homeownership
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Cost of house purchase
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Demographics
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Lifestyle choice
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Inability to sell - increase in properties for rent
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Postponement of house purchase
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Shift in social housing policy
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Demographic and social changes
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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
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Views of low income tenants renting in Ireland
Comparisons other tenant groups
Key Issues include:
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Reasons for Renting
Sourcing Rented Accommodation
Satisfaction with Renting
Rent Burden
Views on issues in the sector
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Tenant survey -major review of the PRS in Ireland
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Online interviews
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Fieldwork - May 2014
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Sample of 500 tenants
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Low Income Tenants – 260 respondents
◦ Rent Supplement or Rental Accommodation Scheme (54%)
◦ Unemployed
◦ Social class comprised category (C2, D, E )
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Other tenants -201 respondents
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Students were excluded
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
Low
Income
Others
Male**
50.4%
59.7%
Female**
49.6%
40.3%
Republic of Ireland **
66.9%
75.6%
8.5%
6.0%
19.4%
10.9%
5.2%
7.5%
UK (incl Northern Ireland)
Other Europe**
Rest of World
Suits my requirements best *
Can't get a mortgage - don't have the deposit
saved/ savings to purchase
Can't get a mortgage - not earning enough or
job is unstable/ on contract**
Not sure where I want to settle down/ live
long term ***
Convenient to things I need to be close to
(e.g. work, school, family)*
Feel I am too young to buy a property**
Can't find a suitable property to buy
Waiting to be offered social housing (local
authority or voluntary body)***
Only in the area for a limited time i.e. college,
job contract etc **
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Low
Income
Others
29.4%
36.8%
29.8%
36.3%
33.1%
23.9%
16.9%
27.4%
15.7%
21.9%
8.1%
14.9%
10.1%
10.4%
14.9%
1.0%
3.2%
8.0%
More freedom of choice
among other renters
Low income tenants may
have few options outside of
the PRS
‘Very difficult to source
accommodation at present’.
Unprecedented lack of rental
stock in Ireland
More onerous requirements
for Low Income tenants?
Low
Income
Others
Did you sign a lease when moving in?*
82.7%
76.1%
Do you have a copy of the lease? ***
90.7%
99.3%
48.4%
57.7%
27.4%
19.4%
89.1%
91.0%
41.9%
41.8%
Were you required to provide references
from previous tenancies or employers? **
Do you have a rent book or do you receive a
quarterly rent receipt from the landlord? **
Were you required to provide a security
deposit to your landlord?
Did the landlord/agent carry out an
inventory on the property prior to you
moving in?
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Overall satisfaction levels were high
Lower levels of satisfaction evident among low income tenants
Low
Income
Others
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%
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
Could suggest poorer
standard of accommodation
May link back to:
obtaining copies of the lease
tenancy inspections
repairs and maintenance
Low
Income
Others
30% or less ***
45.2%
62.7%
31-50%
35.9%
31.3%
50+% ***
17.7%
4.5%
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Rent Supplement
◦ 47% Rent Burden 30%+
◦ 15% - Rent Burden 50%+
Notes: Significance: ***, 0.01; **, 0.05. *, 0.1
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Other Low Income Tenants (ex RS)
◦ 60% - Rent Burden 30%+
◦ 20% - Rent Burden 50%+
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
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%
Options
Sourcing
Accom.
Rent Burden
Findings
Trade Off
Requirements
Satisfaction
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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
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Further rent increases
◦ Significant for rent supplement tenants
◦ Need for greater supports for the intermediate tenant market
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Potential for long term renting,
PRS needs to become more of a policy focus