Data mapping and visualisation on the housing rental market in Wales
Affordable housing helps people to live healthy and productive lives in inclusive communities. In recent years, rents in Wales have increased and there has been lower availability of affordable rental units, exacerbated by the post-pandemic cost of living crisis. The median monthly rent in the private rental market in 2021 was £550, which is equivalent to 23% of the median gross income of private renting households (Office for National Statistics, 2022). However, for people with the lowest income (bottom 25% of the income distribution), the cheapest dwellings (bottom 25% of the price distribution) represent 37% of their income. This means that for lower-income households, even low rents were above the ideal affordability threshold of 30% of their income (Office for National Statistics, 2022).
In light of increasing affordability pressures, in November 2021, the Welsh Government committed to publishing a White Paper “to include proposals for a right to adequate housing, the role of a system of fair rents (rent control) could have in making the private rental market affordable for local people on local incomes and new approaches to making homes affordable” (Welsh Government, 2021).
Alma Economics was commissioned by the Welsh Government to identify and map current and historical data to explore rents and affordability in Wales. The purpose was to develop an understanding of the rental market structures in Wales in order to inform policy development. Our team carried out scoping interviews with rental market stakeholders and data holders to understand the policy environment and obtain available data. We also reviewed relevant documentation and followed a systematic approach to search, identify and review publicly available datasets. We then analysed data trends, patterns and geographical breakdowns across housing indicators and produced accessible spatial maps and data visualisations to present key indicators of the Welsh housing rental market.
Some of our key findings are presented below:
In 2021, households in the bottom 25% of the income distribution living in private rental housing in the bottom 25% of the rental price distribution spent more than 35% of their income on rent. The analysis also suggests that people in more deprived LSOAs face higher affordability pressures than those in less deprived areas.
Private housing developers are responsible for the majority of new construction. However, it should be noted that not all these dwellings might end up in the private rental market. Between 2018 and 2022, private builders completed, on average, 14 new dwellings per 10,000 inhabitants annually, while local authorities were only responsible for the construction of less than one new dwelling per 10,000 inhabitants annually.
The number of households threatened with homelessness increased from 7,000 in 2016 to more than 9,000 in 2022. 67 in every 10,000 households in Wales were threatened with homelessness that year. Three of the most densely populated cities in Wales (Cardiff, Newport, and Swansea) had the largest proportion of households threatened with homelessness.
There was a wide variation across LSOAs in the proportion of housing of poor quality, ranging from less than 10% to more than 25% of dwellings likely to be of poor quality within the same city.
Less densely populated areas had a higher share of tax chargeable empty properties and second homes over the total number of tax chargeable dwellings than more densely populated areas.
Finally, 70% of landlords own only one property, representing 34% of the private rental market, while owners with more than 10 properties (2% of all landlords in Wales) own 21% of the market stock. In Cardiff and Swansea, landlords with more than 10 properties own 30% and 25% of the housing stock, respectively.