The decision-making dynamics of the private rented sector in England's deprived localities

The private rented sector has grownenormously in England since 2003 with much of that growth taking place in themost deprived local authorities with private landlords purchasing older,smaller stock within deprived areas. In... [ view full abstract ]

The private rented sector has grownenormously in England since 2003 with much of that growth taking place in themost deprived local authorities with private landlords purchasing older,smaller stock within deprived areas. In England around £9 billion per year ispaid to private landlords through housing benefit and around one third ofprivate tenants depend on housing benefit. In the most deprived localauthorities the proportion of private tenants needing housing benefit is muchhigher.

Within the most deprived neighbourhoodsthere has been a rapid expansion of private renting. Most theorists attributethis growth to a search for yields in a context of diminished returns from moretraditional investment routes. Within deprived areas, private rental investorsmake decisions which can affect the viability of neighbourhoods. However, theAusterity Agenda and reductions in the tax advantages granted to private rentalinvestments appear to be combining to make the future of private rental muchless certain.

Most studies of private rental investorshave started form an explicit assumption of rational economic actor theorydespite the body of evidence suggesting the role of heuristic factors indecision-making. This study aims to unpick patterns of rental investment in twoof England’s most deprived areas, examining how investors are reacting to thenew institutional context and identifying the role and impact of foreigninvestment in deprived areas. The study uses and embedded case study approachesto try and unpick how landlords and investors think of rental housing and howthe changed policy framework in England may be interpreted and potentiallygamed by the key actors.