Civil Engineering Reference
In-Depth Information
in private rented accommodation. There has been a strong change in the pattern of
housing demand in the UK. At the beginning of the twentieth century, people from
all income levels routinely rented from private landlords. In 1915, for example,
90 per cent of UK families lived in the private rented sector. This change in the
pattern of demand is closely associated with the supply drying up. This happened
following the introduction of
rent controls
by government; these imposed a ceiling
on rents - and created a big disincentive for landlords. As a result, current demand is
mainly met by small-scale individual landlords who maintain and manage properties
in their spare time. In an attempt to reverse this trend, the private rented sector in
the UK has been largely deregulated in recent years.
In general, the market in private housing to rent varies greatly from country to
country for a number of cultural and economic reasons. The main economic factors
affecting the demand in this sector are listed in
Table 4.2
.
Table 4.2
Factors affecting demand for privately rented housing
Current rent levels and expectations of change
Income distribution - which determines affordability
The cost of borrowing and expectations of change
The law on rents and security of tenure
Demographic factors, such as household formation
The price of owner occupation
DEMAND FOR SOCIAL HOUSING
Housing provided by local authorities and registered social landlords, such as
housing associations, is generally referred to as social housing. The origins of social
housing lie in the idea that governments should pay a subsidy towards housing to
make up for the shortage of accommodation available to low-income families. In the
UK during the 1980s and 1990s - with both Conservative and Labour governments
favouring free market policies - much of the local authority housing stock has
either been transferred to housing associations to allocate, manage and maintain or
sold to tenants thereby transferring stock to the owner-occupied sector. A similar
process has been evident in the former Soviet Union, China, Czechoslovakia and
Poland where privatisation of the social housing stock has been a key feature of the
transition process.
Combined, the local authority and registered social landlords sectors still
represent 'home' for approximately five million (18 per cent) of UK households. The
factors that determine the demand for social housing are quite different from those
driving demand for owner-occupied and privately rented housing. The main factors
of demand for social housing are listed in
Table 4.3
.
