The Social Housing Tenants Study 2014 was conducted among more than 1,000 social housing tenants in the UK by The Rental Exchange, a partnership between Experian, the global information services company, and Big Issue Invest, the investment arm of The Big Issue.
With 4.8 million Britons living in social housing, the study found that on average, tenants typically reside in social housing for 12 years; and two-thirds of tenants today (66%) have lived in social housing for more than a decade.
The aspiration to move out of social housing and own a property is an ambition found primarily among the young, with more than half (55%) of those aged 18-34 years hoping to one day get on the housing ladder. This compares to just 30% of those aged 35-54 years and only 9% of those aged 55+ years.
The Rental Exchange Study discovered that when thinking ahead to the future, while almost a third of social housing tenants hope to move into their own property, just over one in two (57%) are also happy staying in their current home. This view is shared among 64% of males and 54% of females, and is highest among older age groups: 81% of those aged 55+ years and 56 per cent of those aged 35-54 years, compared to just 24% of 18-34 year olds.
Only 4% of tenants hope to move out of social housing and rent privately and a further three per cent seek to be able to move out of their current social housing property which they live in with their family, and get their own social housing property.
The goal of the Rental Exchange is to help address the financial, digital and social exclusion challenges faced by many social housing tenants in the UK. Through the Rental Exchange, both social and private landlords will be able to submit information about their tenants’ payment history. In the same way as mortgage-holders are able to build a credit history, rental payments can now be factored into credit decisions, securely and compliantly, to significantly improve the level of insight available to help credit and service providers assess risk and affordability. This will ultimately help to open up access to more affordable credit for tenants by enabling them to more easily demonstrate their creditworthiness.
Jim Mullan, Group Chief Executive at the Big Issue, said: “It is great to be seeing further proof that information on tenants is interesting and valuable for credit providers in the UK. This is the single most exciting initiative that Big Issue Group is involved in at the moment because of the way so many parties benefit from the initiative. All of our partners in the social housing field are excited about improving the household economics of their tenant’s thus increasing sustainability of tenancies.
The social housing organisations involved in this phase of the scheme are not just sharing data to help address the problem of financial exclusion they are also becoming partners in this truly worthwhile initiative to support the lives of millions of people across the UK and improve levels of financial inclusion in many of our most socially and economically challenged communities.”
Jonathan Westley, managing director of Experian’s UK&I Consumer Information Services, said: “Social housing tenants are a dynamic, broad mix of people who have varied aspirations for the future. On average, social housing tenants have lived in their homes for 12 years, yet their regular monthly payments are not taken into account when applying for credit in the same way that mortgage payments are for homeowners. Rental Exchange will change this.
Millions of social housing tenants have little or no credit history, so have been excluded from affordable credit, or paid a premium for it. For credit providers to lend responsibly, and also prevent fraud, they need a more complete view of customers’ financial commitments and payment history. When it comes to getting a mortgage in particular, affordability is crucial when making lending decisions. The addition of rental payment data will improve the insight available to make timely, accurate and responsible lending decisions.”
Further findings from the study reveal:
The less time a tenant has resided in social housing, the greater the likelihood that they aspire to move out and buy their own property; 38% of those that had lived in social housing for up to five years, compared to 22% who had resided in social housing for more than 15 years.
Almost a third of social housing tenants have at least one child under the age of 18 years. Of these, 43% aspire to move out and buy their own property, compared to just 22% of tenants with no children.
Tenants living in London (30%) and the South East (33%) appear to have the highest numbers aspiring to own their own property, compared to just 18 per cent of those living in the South West.
Analysis of social housing rental payment records shared with the Rental Exchange, found that the vast majority of social housing tenants (72%) have no significant arrears on their rent, and this would positively impact their credit scores. When applied to all social housing tenants in the UK, this could mean that up to 3.5 million people could gain potential to access more affordable services and see their financial outlook improved.
Jonathan Westley added: “Our analysis clearly shows the overwhelmingly positive impact that the Rental Exchange will have in helping address the problem of financial exclusion in the UK.”
