Competition in the Private-Rented Sector: Students and Low-Income Families in Brighton, Sussex

Abstract

The expansion of student numbers in higher education in Britain at a faster rate than the provision of residential accommodation has resulted in an increased reliance by students on the private landlord. At the same time access to housing for owner occupation or to rent from municipal authorities has become more difficult for the most deprived sections of the community and they too turn to the private landlord. Paradoxically, although demand is increasing, the supply of privately rented accommodation is decreasing. The consequence is increased competition and rising rents. This paper examines the structure of competition in the furnished subsector of the private-rental market between students and families in housing need in Brighton: a town with a larger than average privately rented sector which is, however, declining, and with three institutions of higher education generating considerable student demand. THE questions of access to and allocation of scarce resources have assumed major importance in recent studies of the operation of the housing market in Britain. In an influential study of the Birmingham housing market published in 1967, Rex and Moorel demonstrated that households are differentially placed with regard to the means and criteria of access to valued forms of housing. While Rex and Moore suggested that 'there will be as many potential housing classes in the city as there are kinds of access to the use of housing',2 they singled out tenure as the key differentiating characteristic in the British housing market and argued that whereas owner occupation and council housing enjoyed legitimation in terms of the value standards of society-the former in terms of the ideal of a property-owning democracy and the latter in terms of the values of the welfare state-tenancies provided by private landlords were less highly valued and housed many of the most deprived households in the city. Subsequent studies have provided empirical evidence of the ways in which the allocative mechanisms in different tenures operate.3 Access to the property-owning democracy is determined by market mechanisms modified by credit systems. The key criterion of eligibility is income level, which at the present time of rapid inflation, high building, land costs and house prices and interest rates in double figures, immediately excludes those members of the population with below-average income levels, including low-paid workers, many newly married couples and students. As well as income, building societies, which are the main source of loan finance for house purchase, also take into account factors such as the applicant's age, sex, marital status and occupation,4 colour5 and characteristics of the property for which a loan is sought, such as its age, dwelling type and location.6 Access to local authority tenancies, on the other hand, is controlled by a process of bureaucratic allocation determined by formal criteria of need. Rules of eligibility commonly include residential qualifications, points systems to determine priority and screening of applicants by administrators.7 These tend to result in the exclusion of foreign and British-born in-migrants to cities, newly married couples and mobile low-income families, and single, young and mobile workers and students.