We need more evidence on tenure and occupancy

It is sometimes argued that policy changes which affect landlords can have no effect on the balance of supply and demand for tenants because the properties which may move between being rented and owner occupation will still exist, and will be occupied all the same.  See for example these recent tweets

This is true, but there may still be an impact on the level of occupation.  I suspect that when properties move from being rented to owner occupation, the balance of supply and demand for those still renting worsens, but I would be interested to learn of any empirical evidence on this – beyond the anecdotal.  Properties moving to owner occupation will also mean the realisation of some consumer surplus for the new owner occupiers at the point of purchase.  Policy changes which push landlords to sell therefore benefit marginal renters – those who can buy once landlords drop their prices – while any chance in supply and demand affects those who cannot.

There is evidence for the overall level of occupation by tenure, such as this from Eurostat

http://ec.europa.eu/eurostat/documents/3217494/9079352/KS-DZ-18-001-EN-N.pdf/884f6fec-2450-430a-b68d-f12c3012f4d0

but the drop – looking at the UK – in occupancy of 32% between tenanted and owner occupied housing will, to a considerable extent, be because owner occupiers are wealthier, and use that wealth to live more spaciously.  On the other hand, there may be a positive correlation between owner occupation and living with children, so the numbers of people in owner occupation will include those who are not yet concerned about supply and demand in the rental sector.

Such overall data supports the idea that there is a link between tenure and occupancy, but how movement of properties between the sectors affects the supply for renters requires some empirical evidence of what happens at the margin.  Ideally there would be a survey of how the numbers of people living in properties change when the property moves between tenures.  A survey of the change in the numbers of rooms per person of where people live when they move between sectors might be easier, but would need to be controlled for changes in wealth, which would be highly correlated with decisions to move between sectors.

That’s about as much as I feel I can say right now – I’ll try to find out if there is the survey information I’m looking for somewhere.  Any leads on this welcome.

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