Current forecasts suggest that perhaps one in four households in England and maybe one in three in London might be living in the private rented sector by 2025. However, there has been little attempt to identify which household types are likely to be most affected. The brief for this study was both to fill this gap and to look somewhat further ahead.
Shelter has asked LSE London to ‘produce plausible modelling, forecasting how many privately renting households there will be in England in 2028, what their demographic composition will be and what proportion of each demographic group will be privately renting.’ The findings would be used to provide an evidence base from which to discuss how policy towards the private rented sector might better serve the full range of households likely to be living in the sector.
The authors undertook a statistical analysis both at national level and for London separately. The analysis had four distinct stages:
- Stage 1: Looking back at the trends in the proportion of households in the private rented sector by household type;
- Stage 2: Clarifying the macroeconomic and housing-market variables that help determine these proportions;
- Stage 3: Regressing the observed proportions of households in private renting on these explanatory variables to identify their impact on tenure patterns by household type;
- Stage 4: Creating forward-looking scenarios based on possible macroeconomic, housing market and supply conditions.
Using the results from these four stages, the authors projected the trends in the proportion of each household type under each of the scenarios.