A few weeks ago I was asked a fascinating question by a local politician
who, after reading the Oxford Property Blog, emailed me and asked –
“Are Oxford Landlords meeting the needs of tenant-parents bringing up their
families in Oxford?”
What an interesting question, I thought, but I didn’t have an answer for
him!
Irrespective of whether you are tenant or a homeowner, to bring up a
family, amongst the most important factors are security and stability in the
home. A great bellwether of that security and stability in a rented property is
whether tenants are constantly being evicted. Many tenancies last just six or 12
months with families apparently at risk of being asked to leave with just two
months’ notice, and on occasion with no good reason being provided.
Some
“left leaning Politician’s” are saying we need to deal with the terrible
insecurity of Britain’s private rental market by mandating longer tenancies of
3 or 5 years instead of the current six to twelve months. However, the numbers
seem to be telling a different story. The average length of residence in
private rental homes has risen in the last 5 years from 3.7 years to 4 years (a
growth of 8.1%). The proportion of private
rented property occupied by tenants with dependent children, has gone from
29.1% in 2003 to 37.4% today.
This data suggests that landlords do not spend their time seeking
opportunities to evict a tenant as the average length of tenancy has steadily
increased. It also shows a proportional shift in occupation of private rental
property by families with children suggesting an effective response to changing
demand.
Looking specifically at Oxford, compared to the National figures, of the
17,662 private rental homes in Oxford, 4,008 of these have dependent children
in them (22.7%), which is well below the National average (37.4%).
But, when considering Oxford, it is important to take account of its
peculiarities: it is a ‘young’ City with
nearly one-third of its population being aged between 18 and 39 years. It is home to some 32,000 students, many of
whom rent their homes from private landlords for all or part of their studies,
and the average Oxford property value is some 16 times the local average
income. That’s a greater affordability
gap than London (as a whole). As a
consequence, demand for private rental properties is fierce, it comes from a
diverse range of people, and it comes from a younger age profile of tenant than
is typically the case in comparable Cities.
As a result, it is to be expected that the proportion of private rental
properties occupied by tenants with dependent children is lower as a proportion
of the whole. For example most students
are either single or have not yet commenced their family.
So, if as it seems, landlords are responding to tenants’ needs when it
comes to the length of tenancy (average length of tenancies are increasing),
and responding to demand from tenants with families (the proportion of tenants
with dependant children is increasing) - I find it strange that some politicians are
calling for fixed term 3 and 5 year tenancies. More heavy-handed regulation may
encourage some landlords to stop renting their property out in the first place,
cutting-off the supply of much needed rental property, meaning tenants will
suffer financially as rents go up due to a greater imbalance of supply and
demand.
In Oxford the only long-term solution to the affordability of property
is to build new houses which I discussed last week. Until that happens the City is in need to a
greater supply of good quality rental property provided by high quality landlords
who can afford to invest.
Heavy-handed legislation that further discourages landlords could break
the fragile but functional market that exists in the City.
