The onward march of Wales’ private rental sector

The Bevan Foundation’s Head of Policy (Poverty), Steffan Evans, takes a look at the latest census data on where people in Wales call their home

Over recent months many of us have followed with interest the ONS’ latest data releases as they reveal more and more information that was gathered by the census in 2021. January 5^th 2023 saw the ONS publish a new round of data, the census findings on housing. As with other areas, more detailed data on housing and the census is expected to be published over the coming months. The data published to date however, on housing tenure, suggests that there have been some very important changes as to where people in Wales call their home over the past decade. This has some potentially significant implications for Welsh society.

More households in Wales live in the private rental sector than do in social housing.

There are now more households living in the private rental sector in Wales than in social housing, a symbolically important moment. Whilst this shift has been decades in the making the importance of this moment should not be overlooked.

The private rental sector in Wales has grown significantly over the past decade. Between 2011 and 2021 the number of households living in the private rental sector grew to over 228,000 an increase of over 44,000 on 2011. By 2021 17% of Welsh households were living in the private rental sector, up form 14.1%. This increase means that 

The number of households living in social housing did grow modestly between 2011 and 2021, increasing by 7,000. Despite this, there are 6,000 more households now living in the private rental accommodation than there are living in the social housing sector, with 16.5% of Welsh households living in social housing.

The changing face of home ownership

Despite the growth in the private rental sector, the owner-occupied sector remains by far the most prevalent housing tenure in Wales. In total 1,347,177 households live in owner-occupied homes in Wales, 66.1% of all households. There have been some important changes in the type of owner-occupied properties households are living in.

Between 2011 and 2021 the number of households living in properties they owned outright increased by over 50,000. In total 38% of Welsh households lived in properties that they owned outright in 2021 compared with 35.4% in 2011. The number of households that live in a home that they own with a mortgage, however, has fallen by 40,000. The tenure now accounts for 28% of all households in Wales compared to 32% in 2021. The only other tenure that has seen a comparable decline is the number of households reporting that they are living in a property rent free, a tenure that saw a 20,000 reduction in a decade.

What are the implications of these changes?

The changing nature of the Welsh housing stock has some potentially significant implications.

The overtaking of the social rented sector by the private rental sector has some real practical policy implications.  As the private rental sector has become larger, the nature of who rents privately has changed. There has been a range of research that has highlighted how the larger number of families with children and older people renting privately has created new pressures and challenges for landlords and tenants alike. The Bevan Foundation’s own work on the Local Housing Allowance has demonstrated many of the challenges facing low-income renters within the private rental sector. All these challenges are set to be heightened if the trends of the past decade continue.

The data also raises questions about the accuracy of some reporting over recent years about the private rental sector in Wales. There have been a number of discussions about the private rental sector shrinking as the Welsh Government introduces new legislation. The latest census data suggests that we should treat any reports about the private rental sector getting smaller with a significant pinch of salt, unless underpinned by more recent data.  

The changes to the owner-occupied sector also raise some potentially important challenges, the exact nature of which will become clearer as more data becomes available to analyse. Is the growth in the number of people who own their home outright, for example, just a reflection of Wales’ ageing population or is there something else driving this shift? What are the implications of the shift to outright home ownership for how wealth is shared across Wales? Getting to the bottom of these questions will be vital if we are to develop a housing policy that works for Wales in the 21^st century.

Steffan Evans is Head of Policy (Poverty) at the Bevan Foundation