Providers need to consider rightsizing approaches as a long-term solution to address supply shortfalls

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Under and over-occupation have been highlighted as an issue within the housing sector for decades. Occupancy issues have been exacerbated by the undersupply of social housing, leading to limited housing choice, and mobility, for social housing tenants over and under-occupying. Rightsizing can be a solution for providers to address demand and occupancy issues within their existing stock.

Under-occupancy in social housing

In total, 9.3 million households under-occupy their property (39% of all households). In social housing, 10% of social renters under-occupy their homes. In contrast, only 3% of households (732,000) in England are over-occupied. Of these, 44.5% live in the social rented sector (making up 8% of social rented households, or 325,000 households).

Ageing population and under-occupancy

The UK has an ageing population, with Census 2021 confirming there are more people than ever in older age groups.[1] 16% live in the social rented sector[2] and are the largest age group in the social rental tenure (28% of all households).[3]

Within general needs social housing, 40% of under-occupied homes are over-65 households, compared to 4% of under-occupied properties that are under-35.[4] Figures from the Office of National Statistics in 2018 highlight that the number of people over the age of 65 is forecast to increase by 27% by 2035. By 2050, one in four people in the UK will be in 65+ age group.[5] 

Under-occupying households downsizing their homes would significantly free up larger housing and could reduce the number of over-occupied households. Whilst there is demand from the 65 and over age group to downsize, the current number of people downsizing does not reflect this. In light of this, the drivers for households and individuals to rightsize are important for organisations to understand and consider.

Social housing supply and demand

The social housing sector is shrinking as a proportion of all dwellings. Data on dwellings by tenure shows that the number of homes available for rent from social housing providers in England has fallen by 6.4% since 1997, from 4.3 to 4.1 million homes. It has shrunk from 21% of all dwellings in England in 1997 to 17% in 2022.[6]

Changes in supply have affected the number of properties available to let, with the number of new social lettings in 2021/22 (267,000) falling 38% from a recent peak in 2013/14 (396,000 new lettings).[7] Local authority waiting lists for social housing in England are growing, with 19,000 households joining from 2021 to 2022, a 2% increase.

Over time, there has been a corresponding increase in over-occupation in social housing. In the last decade, EHS data shows a 31% increase in number of social housing households over-occupying, from 249,000 in 2011/12 to 325,000 in 2021/22.[8]

What is the solution?

It is evident that demand for social housing is outstripping supply. Local authorities and housing associations will therefore need to consider alternative approaches to addressing demand, such as rightsizing.

The difficulty for social housing providers is the time and resource required to match households and create an effective chain through moves that might take place through rightsizing schemes, such as mutual exchanges. Therefore, ensuring the elements of a provider’s rightsizing package address the needs and preferences of its residents is essential to maximising the efficiency of the solution.

To learn more Altair invite you to join our upcoming webinar ‘Maximising the efficiency of your stock: rightsizing and vacancy chains’, taking place on Thursday 24th August, in collaboration with Home Connections. Click here to register.

Will Morley Altair Profile picture

Written by Will Morley, Consultant at Altair Ltd

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