Understanding mixed tenure in English social housing

This report: * quantifies the ratio of social tenants to private tenants across social housing developments in England * explores behavioural challenges to installing energy efficiency and low-carbon heating measures in mixed tenure social housing It highlights barriers for different groups, such as trust, communication, and financial concerns, and notes that motivations and willingness to participate vary across residents, with challenges both before and after installation. The report was completed by IFF Research and involved: * secondary analysis of the National Energy Efficiency Data Framework * primary one-to-one interviews with landlords, tenants, and owner-occupiers within mixed tenure housing developments --- RAF145/2122 Understanding Mixed Tenure in English Social Housing Summary Report IFF Research (2023) Views expressed in this report are from the relevant research agencies, based on data collected from research participants and other evidence, and not necessarily those of the UK government. © Crown copyright 2023 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. Contents 1. Key Findings _____________________________________________________________ 4 Quantitative research findings ________________________________________________ 4 Qualitative research findings _________________________________________________ 4 2. Introduction ______________________________________________________________ 6 3. Quantitative analysis of National Energy Efficiency Data Framework (NEED) data _______ 7 Methodology ______________________________________________________________ 7 Findings _________________________________________________________________ 8 Social housing statistics according to property type ______________________________ 8 Social housing statistics by region __________________________________________ 10 Social housing statistics by property age _____________________________________ 11 Social housing statistics by energy efficiency rating _____________________________ 12 Social housing statistics by household income ________________________________ 13 Limitations ______________________________________________________________ 14 4. Qualitative findings from one-to-one interviews and development case studies _________ 15 Methodology _____________________________________________________________ 15 Experience of living within a mixed tenure development ___________________________ 15 Quality and thermal comfort in mixed tenure environments _______________________ 15 Relationships between residents of different tenures ____________________________ 15 Attitudes towards retrofit works within mixed tenure developments ___________________ 16 Potential future take-up of energy efficiency measures within mixed tenure developments 17 Ability and willingness to pay or contribute towards retrofit works ____________________ 19 Qualitative Conclusions ____________________________________________________ 20 3 Understanding mixed tenure in English social housing 1. Key Findings Quantitative research findings This quantitative research analysed data from the National Energy Efficiency Data Framework (NEED), in addition to other sources. In this report, the ‘social tenant ratio’ describes the ratio of social housing dwellings to all dwellings within a social housing development. The higher the social tenant ratio, the lower the level of mixed tenure. The key findings are: • The analysis identified 459,262 developments in England which are, or have the potential to be, mixed tenure. The research estimated that these developments contain approximately 3.33 million social dwellings in total. • According to the analysis, the mean social tenant ratio across social housing developments in England is 80%, and the median social tenant ratio is 97%. This suggests that the social tenant ratio can vary a great deal between developments. • Converted flats have a higher level of mixed tenure (i.e. a lower social tenant ratio) than purpose-built flats. Purpose-built flats have a median social tenant ratio of 91%, while converted flats have a median social tenant ratio of 50%. Purpose-built flats represent more than half (54%) of all ‘multi-dwelling developments’ identified as being, or having the potential to be, mixed tenure. • London has higher levels of mixed tenure than the rest of England. London also displays greater variation in the degree of mixed tenure across social housing developments. The median social tenant ratio is 79% for outer London, and 76% for inner London. Outside of London, the median social tenant ratio is close to 100%. • Properties built between 1919 and 1999 tend to have lower levels of mixed tenure compared to those built either side of this period. The median social tenant ratio for properties built between 1919 and 1999 is close to 100%, while pre-1919 and post-1999 properties have lower social tenant ratios and larger ranges. • Low rise buildings have the lowest level of mixed tenure, followed by high rise and then medium rise buildings. The median social tenant ratio is 100% in low rise social housing developments, followed by 85% in high rise developments and 70% in medium rise developments. • Developments with higher average household income brackets tend to have a greater degree of mixed tenure. Qualitative research findings The qualitative research involved 50 one-to-one interviews with landlords, tenants and owner- occupiers who own and/or live in private homes within mixed tenure housing developments, and three development case studies. The key findings are: 4 Understanding mixed tenure in English social housing • When leaseholders and tenants have low trust in their social housing provider, they are less likely to want to participate in works, and communications have less impact. • • If government-funded works are only applied to some homes e.g. social housing properties but not privately-owned ones, it has the potential to create an ‘us and them’ mentality within mixed tenure developments. It is important to bear this in mind when communicating about works. In order to make an informed decision about whether or not to agree to works, private landlords, owner-occupiers and private renters all need to be informed upfront about the extent of the works being suggested and benefits of being included (e.g. increase comfort, reduced energy bills, increased property value), and then kept informed of progress at ‘key’ points (e.g. if delays are expected or works have been completed). • A lack of awareness and understanding of government programmes such as the Social Housing Decarbonisation Fund (SHDF) – and how they apply to privately rented homes within social developments - decreased landlords’ willingness to consider energy efficiency works. • Both private landlords and owner-occupiers responded positively to capping cost contributions for home decarbonisation measures to a third of the costs / £3,300 via the SHDF. The SHDF cap increased some owner-occupiers’ openness to agreeing to larger scale works. • Owners needed to know the cost-benefit value of the works and the length of time it would take for the savings enabled by the upgrade works to offset the initial contribution. Some private landlords and most owner-occupiers were more willing to contribute to the cost of retrofit works if they could pay in monthly instalments over 12 months or longer. • Private landlords were more inclined to use their own budgets or savings to pay for works, rather than taking out a loan of any kind. 5 Understanding mixed tenure in English social housing 2. Introduction Reducing emissions from domestic buildings, which account for 16% of all emissions, is central to the UK government’s strategy to meet their Net Zero target.1 Given that 17% of homes in England are socially rented,2 the social housing sector presents opportunities for energy efficiency and low carbon retrofit. However, the presence of mixed tenure developments is a potential barrier to achieving these aims. Mixed tenure developments in social housing occur where residents live within a residential development under different tenure types (e.g. social renters and owner occupier leaseholders). In certain cases, the decarbonisation of dwellings cannot be achieved as efficiently without treating all dwellings within the same development e.g. external wall insulation and associated ventilation. In mixed tenure developments, this would require private owners or renters within social developments to also agree with the energy efficiency measures planned by the owners of the development. The scale of the challenge is not fully understood and there is limited evidence of the perspectives of those living within mixed tenure developments regarding retrofit works. The Department for Energy Security and Net Zero (DESNZ) therefore commissioned IFF Research (IFF) and the UCL Energy Institute (UCL) to conduct a research study to: 1. Determine the percentage of dwellings in social housing developments which are socially owned vs. non-socially owned. 2. Develop a comprehensive understanding of how those who own and/or live in mixed tenure housing developments experience mixed tenure living, and how they have or would react to retrofit works within their mixed tenure development. This report summarises the key findings for both research objectives. Separate reports covering the two research objectives in more depth can be found [here]. 1 Department for Business, Energy & Industrial Strategy (2023), Final UK greenhouse gas emissions national statistics: 1990 to 2021 - GOV.UK (www.gov.uk) 2 Department for Levelling Up, Housing & Communities (2021), English Housing Survey 2020 to 2021: headline report 6 Understanding mixed tenure in English social housing 3. Quantitative analysis of National Energy Efficiency Data Framework (NEED) data Methodology For the purposes of this research, DESNZ defined a social development as: “… a group of individual dwellings built together at the same time, usually by a single developer, usually within the same building complex, with the intention of being primarily or in part inhabited by socially rented tenants.” There is no single dataset that can be used for analysis of mixed tenure in social developments. Based on the above definition, we used data from the National Energy Efficiency Data Framework (NEED) and His Majesty’s Land Registry (HMLR) to identify social developments in England. We combined tenure data on individual dwellings from NEED with HMLR boundaries3, which represent the locations of freehold registered property in England. Each boundary polygon which contained multiple dwellings, of which at least one was a social housing dwelling, was classified as a social development for the purposes of this project. We tested this method for identifying social developments by comparing the results with a single local authority for which we held detailed records on social housing dwellings and social tenant ratios. This enabled us to test and calibrate the methods used with NEED/HMLR against a known local authority dataset. The tests showed that there was a correlation coefficient of 0.55 suggesting a moderate, positive correlation between the method and known local authority data at the individual ‘social development’ level. To determine the percentage of dwellings in social developments which are socially owned vs non-socially owned, we then calculated the proportion of socially and non-socially rented dwellings within the identified developments and aggregated these findings. We then used these aggregations to report statistics for social developments. In the results that follow, we report the ‘social tenant ratio’, which represents the number of dwellings listed in NEED as being social as a percentage of all dwellings inside the social development. For example, if a social development contained ten dwellings and eight of them were listed as being social, then this would give a social tenant ratio of 80%. A house converted to two flats with only one social dwelling would have a social tenant ratio of 50%. The lower the social tenant ratio, the more ‘mixed’ the development will be. 3 HM Land Registry (HMLR) registers ownership of land and property in England and Wales. Each registered title with HMLR contains a title plan, a register and at least one index polygon. The title plan and register record the general position of the boundaries of a registered title. The index polygon shows the indicative location of a registered title in vector format and mapped against Ordnance Survey (OS) large scale data, MasterMap. 7 Understanding mixed tenure in English social housing The statistics on the social tenant ratio are presented below in tables and using box and whisker plots.4 Findings We identified an estimated 459,262 social developments (social developments) in England using this method. This comprised approximately 3.33 million social dwellings, which represents 79% of the 4.21 million social dwellings reported in DLUHC statistics.5 The ‘missing’ 21% are mostly cases where the method identified an individual dwelling rather than a combination of ‘individual dwellings’ which were considered out of scope for the purpose of this project. The average social tenant ratio for all of England was 80%, while the median value was 97%. Social housing statistics according to property type ‘Purpose built flats’ form the most prevalent property type of social developments (54%), followed by ‘Semi-detached’ (13%), ‘Mid-terrace’ (10%), and then ‘Converted flat’, ‘End terrace’ and ‘Bungalow’ (all at 7%). There is a greater degree of mixed tenure (i.e. a lower social tenant ratio) in social developments of ‘Converted flats’ than in ‘Purpose built flats’. Figure 3.1 shows that ‘Purpose built flats’ have a median social tenant ratio of 91 and an interquartile range of 42, whereas ‘Converted flats’ have a median social tenant ratio of 50 and an interquartile range of 73. All other property types (apart from ‘Detached’) have a median social tenant ratio of close to 100. 4 In box and whisker plots, the ‘box’ columns, indicate the range of floor areas covered by the interquartile range of results (the middle 50 per cent of data points). The upper black bars extend to the 90th percentile, capturing a further 15 per cent of the total number of data points. The lower black bars span to the 10th percentile, also capturing 15 per cent of the total number of data points. Therefore, within each sector, 80 per cent of the total number of data points are displayed with outliers beyond this shown as individual dots. 5 Live Tables on Dwelling Stock, LT100 2021, (12 May 2022) downloaded from https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1074203/LT_1 00.ods 8 Understanding mixed tenure in English social housing Figure 3.1 box and whisker plot6 showing social tenant ratios for each social development by Property type (NEED) 6 In box and whisker plots, the ‘box’ columns, indicate the range of floor areas covered by the interquartile range of results (the middle 50 per cent of data points). The upper black bars extend to the 90th percentile, capturing a further 15 per cent of the total number of data points. The lower black bars span to the 10th percentile, also capturing 15 per cent of the total number of data points. Therefore, within each sector, 80 per cent of the total number of data points are displayed with outliers beyond this shown as individual dots. 9 Understanding mixed tenure in English social housing Social housing statistics by region Social developments in London have a greater degree of mixed tenure than those outside of London. For regions outside of London, there is no significant variation between regions. Figure 3.2 shows that social tenant ratios are lower in London than the rest of England, with median social tenant ratios of 76 for inner London and 79 for outer London, compared to 99 for the rest of England. Figure 3.2 box and whisker plot showing social tenant ratio for each social development by region (NEED) 10 Understanding mixed tenure in English social housing Social housing statistics by property age Around 30% of all social developments occur in the ‘1945-64’ age bracket followed by 27% in the ‘1965-82’ bracket. This generally aligns with statistics published in the English Housing Survey7. As shown in Figure 3.3, developments built between 1919 and 1999 tend to have very low degrees of mixed tenure, with median social tenant ratios close to 100%. The periods either side of this (‘pre-1919’, ‘2000-2011’ and ‘2012 onwards’) have lower social tenant ratios and larger interquartile ranges. This suggests that mixed tenure social developments are more likely to be found in older (pre-1919) properties or newer (post 2000) properties (in particular ‘2012 onwards’). Figure 3.3 box and whisker plot showing social tenant ratio for each social development by Property age (NEED) 7 English Housing Survey, Section 2 Housing Stock Annex tables: https://www.gov.uk/government/statistics/english-housing-survey-2020-to-2021-headline-report downloaded 27 March 2023 11 Understanding mixed tenure in English social housing Social housing statistics by energy efficiency rating We calculated an aggregate EPC rating for each social development (that has dwellings with EPC records). This analysis shows that 45% are rated ‘C’ and 34% are rated ‘D’. Around 30% of social dwellings within scope had no EPC data; this meant we were not able to assign an aggregate EPC to 13% of the social developments identified in this analysis. Figure 3.4 shows that there is very little difference in the median social tenant ratio when aggregated by EPC grade. This shows that the issue of mixed tenure does not disproportionately affect properties of any given EPC grade. Figure 3.4 box and whisker plot showing social tenant ratio for each social development by Current Energy Rating (EPC) 12 Understanding mixed tenure in English social housing Social housing statistics by household income We used the modelled household income data from Experian (which is linked to dwellings in NEED) to analyse household income in social developments. Figure 3.5 shows that 22% of non-social housing dwellings in social developments have a household income over £50,000. Less than 0.1% of social dwellings have an income of over £50,000. 39% of non-social housing dwellings have an income below £30,000 whilst 95% of social dwellings have an income below £30,000. Figure 3.5 Household income (NEED) for non-social housing dwellings in social developments s g n i l l e w d f o e g a t n e c r e p 60% 50% 40% 30% 20% 10% 0% Income bracket (NEED) percentage non-social dwellings percentage social dwellings Figure 3.6 shows the social tenant ratios for developments by the income of non-socially rented dwellings in the development. This aggregation of the data excludes developments where the social tenant ratio is 100% (since there would be no non-social housing dwellings to report on within these blocks). The findings show that median social tenant ratio drops steadily as non-social household income increases. This means developments with a lower level of mixed tenure are associated with private residencies with higher levels of household income. 13 Understanding mixed tenure in English social housing Figure 3.6 box and whisker plot showing social tenant ratio for each social development by household income bracket of non-social dwellings (NEED) Limitations There are a number of known limitations of the method used for this research. Whilst the data is national and has included the entire population of social dwellings in England (using the NEED data framework), there are limitations to this data. Specifically, some of the data, including ‘tenure’ and ‘household income’ is modelled by Experian. Using modelled data can result in outputs that may contain errors and/or bias. With this in mind, the results presented here should be treated as estimates with known limitations. In addition, the method adopted here was only tested against a single local authority’s data. Whilst these tests showed a moderately positive correlation coefficient of 0.55 between the results derived from NEED and the results for the local authority owned data, the method would be more robust if it was compared against further local authorities to provide stronger evidence regarding its accuracy. Despite these limitations, this method is national (England) and as such the results are based upon a very large population of millions of dwellings. This means that it draws upon a very large number of dwellings which can be contrasted with surveys such as the English Housing Survey which uses a sample of less than 4,000 social housing dwellings to extrapolate national percentages. A summary of the key findings from this quantitative analysis of NEED data can be found in Chapter 1: Quantitative research findings. 14 Understanding mixed tenure in English social housing 4. Qualitative findings from one-to-one interviews and development case studies Methodology We answered the second research objective through qualitative research consisting of: • Fifty one-to-one interviews with individuals who own and/or live in private homes within mixed tenure housing developments (private landlords, owner-occupiers and private renters). • Three development case studies which sought to include perspectives of all those impacted by mixed tenure, by focussing on specific mixed tenure developments. These included in-depth interviews with social housing provider representatives and residents (including those living in privately owned and social dwellings), a resident survey and site visits. Experience of living within a mixed tenure development Quality and thermal comfort in mixed tenure environments Private landlords, owner-occupiers and private renters determined the quality of their homes within mixed tenure environments based on the structural integrity of the building, its age, safety features and thermal comfort of their homes. Energy efficiency was not top of mind for most owner-occupiers and private renters, and very few knew the EPC rating of their property. Across all respondent types, there was a common view that privately owner-occupied properties were typically of a higher quality than social housing properties within the same mixed tenure developments, particularly developments containing houses rather than flats. Comparisons typically centred on the external condition or appearance of other houses on a street or whole flat buildings and did not extend to considerations of the energy efficiency of other buildings. Owner-occupiers were able to make improvements to their own properties in a way that private renters were not. Relationships between residents of different tenures It was important to explore relationships between residents of different tenures to understand whether they would present challenges when implementing retrofit measures (e.g. private tenants being frustrated that social tenants are receiving improvements for free, while they may need to contribute to the cost of the works). Relationships between residents of different tenures were influenced by the following factors: 15 Understanding mixed tenure in English social housing • Development type. For example, relationships between neighbours in terraced houses were generally reported to be cordial and influenced by factors such as having children of similar ages or seeing one another in a communal garden. Whereas people who lived in flats were less likely to know their neighbours because people saw other residents less frequently. • Physical distribution of private and social properties. Private renters and owner- occupiers who were more physically separated (e.g. socially rented flats on one floor while privately owned flats were on another) tended to report having a slightly worse relationship, or no relationship at all, with their socially renting neighbours. • Time spent in the property. Cordial relationships between residents were more common amongst those who had lived in their properties for a long time, whereas factors such as income or location did not appear to have any effect on these relationships. • Disputes over communal areas and shared service charges. Some owner-occupiers were frustrated that they had to contribute financially to works, on top of regular service charges, whereas social renters’ share of the costs were covered by the council or housing association. "There is sometimes some resentment, or unhappiness, when there are building or maintenance works/issues because when there’s any works that have to be done we have to pay for them, whereas the social housing people [renting from the council] get it all done free.” Owner-occupier, 5-10 years, £31,000 - £60,000, West Midlands Attitudes towards retrofit works within mixed tenure developments Private landlords, owner-occupiers and private renters were broadly aware of the types of retrofit works that were possible at the single-property level, with double glazing, modern boilers, smart meters and “insulation” being most front of mind. As they were largely responsible for the installation of measures, private landlords and owner-occupiers could provide more details of retrofit works that had been carried out, such as the exact type of measure and when each of these was installed. Overall, there was a lower awareness of what energy-efficiency measures would need to be implemented at a whole-block level, although some owner-occupiers referred to solar panels and heat pumps. Private landlords showed slightly more awareness of works such as roof replacement and whole-block insulation. 16 Understanding mixed tenure in English social housing Potential future take-up of energy efficiency measures within mixed tenure developments Most owner-occupiers and private renters were in favour of participating in retrofit improvement works and having measures installed because they recognised the advantage of cutting their heating bills. They were more open towards smaller / less intrusive works (e.g. installing smart meters) or bigger works if they could be completed within a few months. Some owner-occupiers were reluctant to agree to upgrades due to concerns around the quality of the work that the social housing provider would arrange. In addition, owner-occupiers were less willing to participate in works because the works being led by the social housing provider would result in them having less control over the details of the work (such as costing, choice of contractors, and timeframes). However, private owners also admitted to not having a lot of technical expertise or knowledge of the best contractors or materials. Case study A: Different stakeholders on mixed tenure properties have different priorities relating to aspects of retrofit works. A 1960s development in North London, with roughly 35% social housing and 65% private leaseholders, with poor energy performance. The residents of this development and the local authority have been in dispute over the approach to replacing a communal heating system, installed in 2010. Both social tenants and leaseholders agreed there was an issue with the heating system that needed resolution but their different perspectives on costs have made it difficult to reach a consensus. At the time of research, some leaseholders preferred individual boilers because they wanted the autonomy over their heating (and associated costs) that individual boilers provided, while they were also concerned that the communal system was not sufficiently energy efficient. Social tenants knew that they would not have to pay for works and were therefore keen for the local authority to progress with their preferred new (communal) heating system. Different stakeholders on mixed tenure properties had different priorities relating to financial, environmental, thermal comfort and practical aspects of retrofit works. The local authority considered these through a longer-term lens, while residents took a more short- medium perspective. Understanding these perspectives – where they overlap and where they conflict – is fundamental to finding a solution that works for all. There were a range of additional factors which affected willingness to have measures installed: anticipated level of disruption, the timeliness of works, the types and quality of communications needed surrounding the work, existing relationships between relevant parties and awareness of government grants such as the Social Housing Decarbonisation Fund (SHDF). It should be noted that factors such as disruption and timeliness are not unique to mixed tenure developments. 17 Understanding mixed tenure in English social housing • Anticipated level of disruption: Private landlords were generally happy to have measures installed provided their tenants were able to continue living in the apartments with minimal disruption to their daily lives. This view was mirrored by owner-occupiers. There was a more mixed response from private renters regarding whether the level of disruption would deter them from wanting energy efficiency measures installed. • Concerns regarding the ability of the social housing provider to deliver works: Some participants had negative previous experiences with their local authority, which made them cynical about whether the works would be delivered in a timely manner. Participants were also concerned that they wouldn’t be given sufficient agency over the works by the administrator. "From my experience, even the smallest things like roofs on the local authority houses takes 3-4 weeks as opposed to 3 days." Private landlord, 5-10 years, between £31,000 and £60,000, East England • Communications received regarding works: Private landlords and owner-occupiers felt they would only be comfortable making a decision about works if they were fully informed about the extent of the works, costs and potential savings as a result of the works. Having clear initial communications via letters combined with the opportunity to take part in a consultation were more likely to increase willingness to agree to works being conducted. However, one case study (example below) demonstrated that excessive communications could potentially have a negative impact of residents’ views of the works being conducted. • Relationships between non-social tenants and social housing providers: Willingness to have measures installed was impacted by existing relationships between non-social residents and social housing providers. Specifically, some participants had experienced works being completed to a poor standard in the past, and were less trusting and willing to take part in works by their social housing provider as a result. • Option to use the SHDF and other government grants: Some private landlords stated that knowing the existence of financial government support would motivate them to take on retrofitting works because they helped cover some of the costs. “BEIS [now DESNZ] are going out of their way, they don't want you to fully contribute so they are giving you the option to only pay a third…that's going to be a great thing". Landlord, 10-20 years, >£60,000, South East While others agreed, they felt that they needed to know more about the schemes before committing. 18 Understanding mixed tenure in English social housing Case study C: The need for balance in communications A development in a part of London with high levels of deprivation, with roughly 70% social housing and 30% private leaseholders. The building was built in the 1970s but has had no substantial work done on it since, which means it is poorly insulated and residents face high utility bills. A new Tenant Management Organisation (TMO) had been recently brought in to rebuild trust following prolonged mismanagement by a previous TMO. They instigated a ‘co- design’ process to involve the residents in the retrofit works as much as possible. Whilst views on communications were broadly improved, the co-design process itself had a more mixed reception. For example, as part of the consultation process, residents were sent numerous surveys to capture their views on a range of design features. This led to survey fatigue (one felt that they had been ‘bombarded’), and a perception that ‘a lot of ideas [were] being thrown about’ without much resulting action, due to the slow progress of the overall refurbishment. Residents also struggled with the large scope of the retrofit works, which included a new heating system, new roof insulation, wall insulation and support for the communal areas to fix a flooding issue. Providing communications on all of these topics left some residents feeling confused and disengaged. This example highlighted the importance of carefully considering the type, tone and volume of communications needed, particularly where trust and engagement are already low. It is not sufficient to communicate more, it is also necessary to consider how to communicate effectively. Ability and willingness to pay or contribute towards retrofit works Overall, private landlords seemed more receptive to the idea of contributing towards the cost of retrofit works than owner-occupiers. Private landlords and owner-occupiers were not averse to contributing financially, but their willingness to pay was dependent on various factors. For instance, the consideration was not just about size of payment, but about the cost-benefit value of the works and the payback period for the upgrade works. People who were unwilling to contribute to the costs of retrofit works were motivated by very tight budgets and the conviction that they would not see the benefits in time before planning to sell the property. The following factors had the most influence on individuals’ ability and willingness to pay or contribute towards retrofit works: • Financial benefits on the rental market. Private landlords were more willing to agree to works if they had confidence they would make their property more desirable to prospective tenants. 19 Understanding mixed tenure in English social housing • Repayment periods: For some private landlords and most owner-occupiers, the option of having some control over how and when they pay their share of the cost of the retrofit works was a key driver to their willingness to contribute to the cost of retrofit works. The most common suggestion was splitting the costs in instalments over a period of time (e.g. 12 months or longer). There was also a very clear preference towards an interest- free monthly payment plan. • Availability of funding from the SHDF: In general, the availability of a capped cost via the SHDF, made both private landlords and owner-occupiers more open to the idea of contributing financially. The SHDF cap also increased some owner-occupier’s openness to agreeing to larger scale works and accepting the associated disruption because they felt they would be getting a ‘better deal’, with their cost still being capped at the maximum contribution. • Source of funding: Private landlords were more inclined to use their own budgets or saving to pay for works, rather than taking out a loan of any kind. If borrowing was necessary, people preferred a government loan (if SHDF offered a list of available loans in an information pack) or to borrow from the social housing provider, rather than any other 3rd party loan. Qualitative Conclusions Trust in those conducting works impacted willingness to participate. When leaseholders and tenants had low trust in their social housing provider, they were less likely to want to participate in works, and communications had less impact. Cultivating this trust, particularly among leaseholders, is an important step in gaining consent for retrofit works in mixed tenure environments. Communications ideally need to encourage a two-way dialogue between leaseholders and those responsible for the works. That said, care should be taken at giving residents too much ‘say’ over decisions, given their lack of technical expertise, and short-medium term perspective. This may present as a greater challenge within mixed tenure developments with different tenures having different motivations and concerns regarding works. In addition, if it is necessary for works to be applied to certain properties and not others (e.g. social housing properties but not privately-owned ones), it is important when communicating to be mindful of the potential ‘us and them’ mentality that could develop within mixed tenure developments. Individuals need relevant and timely information upfront and during works. Private landlords, owner-occupiers and private renters all need to be informed upfront about the extent of the works being suggested and benefits of being included (e.g. increase comfort, reduced energy bills, increased property value), and kept informed of progress at ‘key’ points, such as if any delays are expected or works have been completed. Private landlords and owner- occupiers tended to be more comfortable making a decision about the works, if they understood the costs associated and available financing support. 20 Understanding mixed tenure in English social housing Those living in mixed tenure developments had different motivations to agreeing to participating in works. Owner-occupiers would be more willing to contribute to costs if they believed their thermal comfort would increase and they would see a return on investment via lower energy bills (as soon as possible). Private landlords were also more willing if they could be sure the value of their property would increase. These motivations differed somewhat to social providers who were more likely to be motivated by implementing long term solutions that supported their net zero/sustainability targets (as well as meeting their duty of care to tenants with regards to thermal comfort). Understanding these perspectives – where they overlap and where they conflict – is fundamental to finding a solution that works for all. There was low awareness and understanding of grants such as SHDF. Some private landlords thought that grants such as SHDF did not extend to them, would be means tested (and therefore they would not qualify) or only covered measures which would not be suitable for their properties e.g. loft and cavity wall insulation within first floor flats. A lack of awareness and understanding of government programmes such as the Social Housing Decarbonisation Fund (SHDF) decreased landlords’ willingness to consider energy efficiency works. Awareness of the SHDF and associated cap had a positive impact on willingness to contribute to costs of works. Both private landlords and owner-occupiers were more open to the idea of contributing to costs if these were capped to a third of the costs / £3,300. The SHDF cap also increased some owner-occupiers’ openness to agreeing to larger scale works because they felt they would be getting a ‘better deal’ agreeing to larger scale works, with their cost still being capped at the maximum contribution. However, despite the cap, private landlords with multiple properties were unlikely to agree to works on more than one of their properties at a time. More information is needed other than the pure cost contribution required. Both private landlords and owner-occupiers were not averse to contributing, but their willingness was dependent on other factors. Owners needed to know the cost-benefit value of the works and the length of time it would take for the savings enabled by the upgrade works to offset the initial contribution. 21 Understanding mixed tenure in English social housing This publication is available from: www.gov.uk/government/publications/understanding-mixed- tenure-in-english-social-housing If you need a version of this document in a more accessible format, please email alt.formats@energysecurity.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use. 22 --- RAF145/2122 Understanding Mixed Tenure in English Social Housing Qualitative Report IFF Research (2023) Views expressed in this report are from the relevant research agencies, based on data collected from research participants and other evidence, and not necessarily those of the UK government. © Crown copyright 2023 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. 2 Understanding mixed tenure in English social housing: qualitative report Contents Executive Summary __________________________________________________________ 4 Introduction ______________________________________________________________ 4 Methodology ______________________________________________________________ 4 Findings _________________________________________________________________ 5 Conclusions ______________________________________________________________ 7 Glossary __________________________________________________________________ 8 1. Introduction ______________________________________________________________ 9 Project background ________________________________________________________ 9 Research objectives ________________________________________________________ 9 Research structure ________________________________________________________ 10 2. Methodology ____________________________________________________________ 12 3. Experience of living within a mixed tenure development ___________________________ 16 Quality and thermal comfort in mixed tenure environments _________________________ 16 Relationships between residents of different tenures _____________________________ 18 4. Attitudes towards retrofit works within mixed tenure developments __________________ 20 Awareness of types of retrofit works that have taken place or are suitable _____________ 20 Perceived impact of upgrade or retrofit works ___________________________________ 20 5. Potential future take-up of energy efficiency measures within mixed tenure developments 22 Willingness to have energy efficiency measures installed __________________________ 22 Factors affecting willingness to having energy efficiency measures installed ___________ 22 6. Ability and willingness to pay or contribute towards retrofit works ____________________ 27 Factors affecting ability and willingness to pay or contribute towards retrofit works ______ 27 7. Case studies ____________________________________________________________ 31 Case Study A ___________________________________________________________ 31 Case Study B ____________________________________________________________ 37 Case Study C ___________________________________________________________ 41 8. Conclusions _____________________________________________________________ 46 Key findings _____________________________________________________________ 46 Potential further research ___________________________________________________ 47 3 Understanding mixed tenure in English social housing: qualitative report Executive Summary Introduction Reducing emissions from domestic buildings, which account for 16% of all emissions, is central to the UK government’s strategy to meet their Net Zero target.1 Given that 17% of homes in England are socially rented2, the social housing sector presents opportunities for energy efficiency and low carbon retrofit. However, the existence of mixed tenure developments is thought to be a potential barrier to achieving these aims. If private owners or renters within mixed tenure developments do not agree with the energy efficiency measures planned by the owners of the development itself, the decarbonisation of mixed tenure dwellings will not be achieved as efficiently in certain cases. To date there has been a lack of evidence detailing the views and perspectives of those living within mixed tenure developments, especially regarding retrofit works. The Department for Energy Security and Net Zero (DESNZ) therefore commissioned IFF Research (IFF) and the UCL Energy Institute (UCL) to conduct a research study to develop a comprehensive understanding of how those who own and/or live in mixed tenure housing developments experience mixed tenure living, and how they have or would react to retrofit works taking place within their mixed tenure development. Methodology The study included: • Fifty one-to-one interviews with individuals who own and/or live in private homes within mixed tenure housing developments (private landlords, owner-occupiers and private renters). • Three development case studies which sought to include perspectives of all those impacted by mixed tenure (including social tenants and social housing providers), by focussing on specific mixed tenure developments. 1 Department for Business, Energy & Industrial Strategy (2023), Final UK greenhouse gas emissions national statistics: 1990 to 2021 - GOV.UK (www.gov.uk) 2 Department for Levelling Up, Housing & Communities (2021), English Housing Survey 2020 to 2021: headline report 4 Understanding mixed tenure in English social housing: qualitative report Findings Experience of living within a mixed tenure development Quality and thermal comfort in mixed tenure environments Across private landlords, owner-occupiers and private renters, there was a common view that (private) owner-occupied properties were typically of a higher quality than social housing properties within the same mixed tenure developments. This was particularly apparent in mixed tenure developments containing houses rather than flats. Owner-occupiers were able to make improvements to their own properties in a way that private renters were not e.g. several described making improvements such as fitting new windows, (resulting in more differences between properties within mixed tenure developments). Issues with thermal comfort therefore arose more often among private renters than owner-occupiers. Relationships between residents of different tenures Relationships between residents of different tenures were influenced by the following factors: development type, physical distribution of private and social properties, time spent living in the property, and disputes over communal areas and shared service charges. There was some evidence of disputes linked to developments being mixed tenure. These typically related to the upkeep of communal areas, or increased service charges. Some owner- occupiers were frustrated that they had to contribute financially to works on top of regular service charges, whereas social renters’ share of the costs were covered by the council or housing association. Attitudes towards retrofit works within mixed tenure developments Private landlords, owner-occupiers and private renters were broadly aware of the types of retrofit works that were possible at the single-property level, with double glazing, modern boilers, smart meters and “insulation” being most front of mind. Overall, there was a lower awareness across tenure groups of what energy-efficiency measures would need to be implemented at a whole-block level. Potential future take-up of energy efficiency measures within mixed tenure developments Some owner-occupiers were reluctant to agree to upgrades due to concerns around the quality of the work that the social housing provider would arrange. In addition, owner-occupiers were less willing to participate in works within their mixed tenure development, because the works being led by the social housing provider would result in them having less control over the details of the work (such as costing, choice of contractors, and timeframes). However, most owner-occupiers and private renters were generally in favour of participating in retrofit improvement works and having measures installed, because they recognised the advantage of cutting their heating bills and the value of reducing their carbon footprint. They 5 Understanding mixed tenure in English social housing: qualitative report were more open towards smaller/ less intrusive works (e.g. installing smart meters) or bigger works if they could be completed within a few months. There were a range of additional factors which affected willingness to have measures installed. Some factors, such as anticipated level of disruption, the timeliness of works (often informed by previous experience of social housing provider led works) aren’t only important within mixed tenure developments. The following factors were more specific to mixed tenure developments: • Communications received regarding works: The case studies indicated that excessive communications could potentially have a negative impact of residents’ views of the works being conducted and the importance of offering residents the choice about whether to be consulted (rather than either forcing consultation on them or not consulting them at all). • Relationships between non-social tenants and social housing providers: Willingness to have measures installed was impacted by existing relationships between non-social residents and social housing providers. Specifically, some residents did not trust providers to complete works to a high standard. Some participants had experienced works being completed to a poor standard in the past, and were less trusting and willing to take part in works by their social housing provider as a result. • Option of using the Social Housing Decarbonisation Fund (SHDF) and other government grants: Some private landlords stated that knowing the existence of financial government support would motivate them to take on retrofitting works because they helped cover some of the costs. Whilst others agreed, they felt that they needed to know more about the schemes before committing. Ability and willingness to pay or contribute towards retrofit works Overall, private landlords seemed more open to the idea of contributing towards the cost of retrofit works than owner-occupiers. Once explained to them, the cap on the contribution proposed by the SHDF funding typically increased both audiences’ willingness to contribute. However, some private landlords with multiple properties mentioned they would not be willing nor able to do so for multiple properties at once. Private landlords or owner-occupiers unwilling to contribute to the costs of retrofit works were motivated by very tight budgets and the conviction that they would not see the benefits in time before planning to sell the property. The following factors had the most influence on individuals’ ability and willingness to pay or contribute towards retrofit works: • Repayment periods: For a few private landlords and most owner-occupiers, the option of having some control over how and when they pay their share of the cost of the retrofit works was a key driver to their willingness to contribute to the cost of retrofit works. The most common suggestion was splitting the costs in instalments over a period of time (e.g. 12 months or longer). There was also a very clear preference towards an interest- free monthly payment plan. • Impact of works being funded by SHDF: Both private landlords and owner-occupiers were more open to the idea of contributing to costs if these were capped to a third of the 6 Understanding mixed tenure in English social housing: qualitative report costs / £3,300. The main benefit was the idea of having money-saving and carbon- footprint-cutting works completed at a fraction of the price it would take for them to install and fund the updates themselves. The SHDF cap also increased some owner- occupiers’ openness to agreeing to larger scale works and accepting the associated disruption, because they felt they would therefore be getting a ‘better deal’. • Source of funding: Private landlords were more inclined to use their own budgets or saving to pay for works, rather than taking out a loan of any kind. If borrowing was necessary, some private landlords (with previous experience of claiming government grants), preferred local authority funding over central government funding. Conclusions The key conclusions from the qualitative research were as follows: • When leaseholders and tenants had low trust in their social housing provider, they were less likely to want to participate in works, and communications had less impact. • Communications ideally need to encourage a two-way dialogue between leaseholders and those responsible for the works. That said, care should be taken at giving residents too much ‘say’ over decisions, given their lack of technical expertise, and short-medium term perspective. • Individuals need relevant and timely information upfront about the extent of the works being suggested and benefits of being included (e.g. increased comfort, reduced energy bills, increased property value and so on), and then to be kept informed of progress at ‘key’ points. • Understanding the different motivations (and where these overlap and conflict) across different stakeholder groups (e.g. housing providers and leaseholders) is fundamental to finding a solution that works for all within the mixed tenure context. • Some private landlords thought that grants such as SHDF did not extend to them, would be means tested (and therefore they would not qualify) or only covered measures which are not suitable for their properties e.g. loft and cavity wall insulation within first floor flats. This lack of understanding limited the impact of government funding on landlords’ willingness to consider energy efficiency works. • Both private landlords and owner occupiers were more open to the idea of contributing to costs if these were capped to a third of the costs / £3,300. The SHDF cap also increased some owner-occupiers’ openness to agreeing to larger scale works because they felt they would be getting a ‘better deal’ agreeing to larger scale works, with their cost still being capped at the maximum contribution. • Among both private landlords and owner-occupiers, there was not an aversion towards financial contributions, but their willingness to pay was dependent on other factors such as how much value for money the contributions represented. 7 Understanding mixed tenure in English social housing: qualitative report Glossary Energy Performance Certificate (EPC). These are required in the UK when residential or commercial buildings are constructed or put up for sale or rent, to provide the prospective owner or tenant with information on the energy performance of the building and recommendations for improvement. EPCs use an A-G rating scale based on the modelled energy bill costs of running the building. They are valid for 10 years. The Social Housing Decarbonisation Fund (SHDF) aims to upgrade social housing stock currently below EPC rating C up to that standard. Freehold. When an individual(s) owns a property and the land it is built on for as long as that individual(s) wants. Leasehold. When an individual(s) owns a property but not the land the property is built on. It means they have the right to occupy it for a set period of time, typically 99 years or more. Mixed tenure development. Mixed tenure housing is where residents live within a residential development under different tenure options. For example, where within a block of flats or within a street some homes are privately owned by residents, whilst others are rented from a social housing provider. Homes may be owned via shared ownership schemes, Right to Buy schemes, or outright. Owner-occupiers: A person who owns (freehold or leasehold) the house or flat in which they live. Social housing. Accommodation provided by registered housing providers for people typically on lower incomes or with particular housing needs. Social housing provider. Typically housing associations or local authorities which provide social homes to those who need them. Housing associations are not-for-profit organisations and local authorities are local government bodies (or ‘councils’). Social Housing Decarbonisation Fund (SHDF). SHDF is a government fund aimed at improving the energy performance of England’s social homes, by encouraging social housing providers to accelerate their decarbonisation plans and upgrade social housing stock currently below EPC rating C up to that standard. The Main Fund will cover mixed tenure developments as well, which would ask private owners within social housing to contribute towards the cost of the retrofit measures if they have a household annual income of more than £31,000. Tenure. Tenure defines the conditions under which a home is occupied, whether it is owned or rented, and if rented, who the landlord is and on what financial and legal terms the let is agreed. In this report, respondents are typically grouped into the following tenure categories: owner occupiers, private renters, social renters as well as private landlords. Retrofit: Improvements made to a building or development after it has finished construction e.g. loft insulation, wall insulation or replacing old windows with double glazing. 8 Understanding mixed tenure in English social housing: qualitative report 1. Introduction Project background Reducing emissions from domestic buildings, which account for 16% of all emissions, is central to the UK government’s strategy to meet their Net Zero target.3 A series of policies and programmes are seeking to improve the energy performance of homes, through legislative change and grant-based investment across housing sectors.4 Given that 17% of homes in England are socially rented5 and the management and maintenance structures that exist, the social housing sector presents opportunities for energy efficiency and low carbon retrofit. The 2019 Conservative Manifesto committed to a £3.8bn Social Housing Decarbonisation Fund (SHDF) over a 10-year period to improve the energy performance of social rented homes, on the pathway to Net Zero 2050. There are a range of technical and financial barriers to be overcome in the retrofit of the social housing stock (which funds like SHDF are designed to address).6 One such barrier arises from the existence of an estimated 460,000 mixed tenure developments across England, where residents live within a residential development under different tenure types. For example, a block of flats might contain some flats which are owned by residents or private landlords, whilst others are owned and rented out to social tenants by a social housing provider. This has become increasingly complex through the sale of social housing to private leaseholders, who may in turn offer these properties in the private rental market. In certain cases, the decarbonisation of mixed tenure dwellings cannot be achieved as efficiently without also treating privately owned or rented dwellings within the same development e.g. external wall insulation and associated ventilation. This means schemes like the SHDF need to cater for mixed tenure buildings, and scenarios where private owners or renters may not agree with the energy efficiency measures planned by the owners of the development itself. Research objectives There is some evidence about how prevalent mixed tenure social housing is. For example, the Department for Levelling Up, Housing & Communities (DLUHC) estimated that 28% of dwellings in social buildings over 18m in height were private leaseholds, with a figure of 30% for social buildings between 11-18m in height.7 However, there is a lack of evidence detailing 3 Department for Business, Energy & Industrial Strategy (2023), Final UK greenhouse gas emissions national statistics: 1990 to 2021 - GOV.UK (www.gov.uk) 4 Heat and buildings strategy - GOV.UK (www.gov.uk) 5 Department for Levelling Up, Housing & Communities (2021), English Housing Survey 2020 to 2021: headline report 6 https://www.gov.uk/government/publications/barriers-to-retrofit-in-social-housing 7 Building Safety Programme: monthly data release - October 2021 - GOV.UK (www.gov.uk) 9 Understanding mixed tenure in English social housing: qualitative report the scale of challenge this stock might pose to conducting retrofit works and therefore reducing emissions from domestic buildings. There has also been a lack of evidence detailing the views and perspectives of those living within mixed tenure developments, especially regarding retrofit works. The Department for Energy Security and Net Zero (DESNZ) therefore commissioned IFF Research (IFF) and the UCL Energy Institute (UCL) to conduct a research study to meet two overarching objectives: 1. Develop a comprehensive understanding of how those who own and/or live in mixed tenure housing developments experience mixed tenure living, and how they have or would react to retrofit works within their mixed tenure development. 2. Determine the percentage of dwellings in social housing developments which are socially owned vs non-socially owned. This report focuses on the first of these research objectives. We addressed this research aim through qualitative research, specifically-one-to-one semi-structured interviews and case studies of mixed tenure developments. The research was designed to answer the following specific research questions: • What are the differing experiences of socially and non-socially rented households in mixed tenure social housing developments with regards to: building quality; thermal comfort and energy efficiency of dwelling; previous interactions with social housing provider; previous works completed on their mixed tenure development? • To what extent are non-socially rented households willing and able to contribute towards costs of retrofit works within their mixed tenure development? • To what extent are non-socially rented households willing and able to contribute towards costs of work to complete retrofits funded by the SHDF? • In what ways can mixed tenure in social housing developments affect the buildings and surrounding environment, and impact the nature and frequency of works completed on these buildings? This report presents the findings from the qualitative research. Findings answering the second overarching objective are detailed within a separate quantitative report. Findings from across the two methodologies are summarised in a separate summary report: Understanding Mixed Tenure in Social Housing Summary Report: quantitative and qualitative findings. Research structure This report is separated into two sections. Findings from the one-to-one interviews form the majority of this report and are explored in the following chapters: • 3. Experience of living within a mixed tenure development • 4. Attitudes towards retrofit works within mixed tenure developments 10 Understanding mixed tenure in English social housing: qualitative report • 5. Potential future take-up of energy efficiency measures within mixed tenure developments • 6. Ability and willingness to pay or contribute towards retrofit works Findings from the mixed tenure development case studies are presented in 7. Case studies but also referenced in preceding chapters when relevant. 11 Understanding mixed tenure in English social housing: qualitative report 2. Methodology One-to-one interviews We conducted 50 one-to-one interviews with owner-occupiers, private renters and landlords of private homes who own and/or live in private homes within mixed tenure housing developments. A specialist recruiter (Mojo Fieldwork) recruited individuals, initially by using local recruiters within communities and a database of respondents, and then snowball sampling from these contacts. The sampling methodology was designed to recruit from a wide pool of residents. A telephone screener helped recruit individuals based on the characteristics outlined in Table 1. Fieldwork occurred between August and September 2022. Interviews lasted around 45 minutes and took place via telephone or video call (Zoom or Teams) depending on the respondent’s preference. Respondents received an incentive of £40 to thank them for their time. Table 1 displays a breakdown of the respondents interviewed. Table 1. Respondents interviewed during one-to-one interviews Category Sub-category Minimum Target Interviews Achieved8 Tenure Tenure Tenure Dwelling type Dwelling type Dwelling type Owner Occupier Private Landlord Private Renter High Rise Flat Low Rise Flat Terraced House 10 10 10 8 8 8 Provider of social homes Local Authority 12 Provider of social homes Housing Association 12 Annual household income Less than £31,000 Annual household income £31,000 - £60,000 5 5 Annual household income More than £60,000 5 Total 50 17 16 17 10 20 27 33 25 17 20 13 50 We used semi-structured topic guides to complete the interviews, covering: 8 Please note that types of property (high rise flat, low rise flat and terraced housing) and housing provider type (local authority or housing association) do not sum to 50 as some landlords owned properties in more than one development. 12 Understanding mixed tenure in English social housing: qualitative report • Living situation or context of properties landlord owns; • Perspectives on energy efficiency; • Perspectives on home upgrades and retrofit; • Previous experience of having works completed in mixed tenure development; We also asked owner-occupiers and private landlords about: • Their ability and willingness to pay for measures completed on property as part of retrofits to mixed tenure developments; • Perspectives on the SHDF and other retrofit schemes. We conducted thematic analysis using an analysis framework, structured under headings relating to the research objectives and allowing discussion to be compared and judgments made about the commonality of experiences, whilst also identifying subgroup differences. Mixed tenure development case studies The development case studies sought to include perspectives of all those impacted by mixed tenure (including social tenants and social housing providers), by focussing on specific mixed tenure developments. For each case study, one development (e.g. a block of flats or row of terraced houses) was selected where both social renters and leaseholders lived. Recruitment We initially recruited via a range of housing providers, targeting a spread of locations, housing types (high rise developments, low rise developments, terraced housing), provider types (local authority or housing association) and participation in the Social Housing Decarbonisation Fund (SHDF) (Demonstrator and Wave 1). However, due to recruitment challenges we adopted a convenience sample. We recruited cases studies using our existing relationships with social housing providers and existing contacts via DESNZ. Our Housing Client Account Managers conducted initial engagement work to identify suitable contacts for this research. The project started with a target of 10 case studies but recruitment proved more challenging than originally anticipated. Challenges included: • Some providers were simply too busy with