Tenure change in London’s suburbs: Spreading gentrification or suburban upscaling?

Antoine Paccoud, Luxembourg Institute for Socio-Economic Research
Alan Mace, London School of Economics and Political Sciences

Link to full paper

The return of private renting in the UK is impressive. Between 2002 and 2015-16, the number of households in the Private Rented Sector doubled. This sector now accounts for 20% of households in the UK and 28% in London. This marks a significant break in the long-term trend towards ownership in the UK. Although Thatcher is most closely associated with the ideal of a ‘property owning democracy’, it has been around for much longer (Francis, 2012) running deep through the Conservative Party. The British are sometimes depicted as being obsessed with property and for those who do own housing it has proved a lucrative asset – although depending on where in the country that property is. Now, the decline in owner occupation has led to calls to think through the significance of the turn back to private renting (Rampen, 2016). 

The article arose from the two authors bringing together their different research interests. Antoine Paccoud had already developed a dataset for England looking at the increase and spread of private renting (Paccoud, 2016).  His interest was in making connections between this and the spread of gentrification, what he calls ‘buy-to-let gentrification’ (after the investment practice of purchasing a dwelling with the aim of putting it on the private rental market). Alan Mace focuses on social change in London and particularly in its suburbs (Mace, 2013).  The suburbs are traditionally dominated by owner occupation and the shift to renting raises questions about social change in these areas. A lot of attention has rightly been paid to suburban decline (Lupton et al, 2013) but our data highlight an important parallel story – that of suburban gentrification.

This paper seeks to reconcile two contradictory tendencies in the geography of buy-to-let gentrification. The first is that at the England-wide scale, upscaling to private renting has been particularly present in more urban, central and disadvantaged areas. The second is that a sizeable proportion of upscaling to the private rented sector occurred in more peripheral Outer London (see map). To investigate this paradoxical situation, the paper uses a detailed analysis of the social and tenurial changes that have occurred between 2001 and 2011. We look at the 23,406 Census Output Areas in London whose boundaries have remained unchanged over that period (an Output Area contains 300 usual residents on average). The analysis reveals that upscaling to the private rented sector was linked to two physical characteristics – period (pre-1900) architecture and proximity to rail-based public transport. While Outer London is dominated by early to mid-20th century semi-detached and terraced (row) housing, there are also 19th century neighbourhoods that offer a more desirable architecture. There are also areas with excellent public transport accessibility to central London. Separately or in combination, these offer a diluted version of the metropolitan milieu gentrifiers seek in the inner city.

Buy-to-let gentrification in Outer London can thus be understood as an overspill into areas affording a semblance of metropolitan milieu in Outer London by better-off tenants uninterested in, or unable to access, ownership and priced out of high house price Inner London. This interpretation reconciles the economic and cultural approaches to gentrification. From the economic side, it explains how buy-to-let investors have been able to use the general value gap opened by the deregulation of the Private Rented Sector to close rent gaps in certain Outer London areas. From the cultural side, it puts the idea of metropolitan milieu, and its London translation as period architecture and access to the centre, at the forefront of the analysis.

The return of the Private Rented Sector has recently become a central political concern because it is occurring alongside quickly rising house prices and rents. This paper is an attempt to better understand the local impacts of this return in London. Indeed, a local increase in private renting means different things if the area is undergoing social upscaling (i.e. if in-movers are better off than those leaving the area) or downscaling (i.e. if out-movers are better off than those moving into the area). As investors, those purchasing with a view to rent are interested in those areas with the potential for social upscaling. This is problematic since it can push forward gentrification – a type of neighbourhood change in which social upscaling and changes to the housing stock are linked to the displacement of existing residents.