Dataspring News

Presentation made by Connie Tang to 2009 Housing Researchers Conference in Sydney

A presentation was made by Connie Tang to 2009 Housing Researchers conference in Sydney on using multiple perspectives (rent-to-income ratios and residual incomes) in evaluating housing affordability in the housing association sector in England. Using data from the COntinuous REcording for new tenants and the Family Resources Survey for existing tenants, the project aimed to identify the variations of magnitude and nature of housing affordability problems between areas and household types. Her presentation started with the conventional measure of affordability, the rent-to-income ratio, in comparing the impact of housing benefit on existing and new tenants' affordabilty in 2006/07.

Connie then showed the results of the residual income approach in measuring household affordability. The UK standard measure of poverty for existing tenants is below 60 percent of contemporary median (equivalised) household income. For new tenants it is below 120% Income Support income standards. Earlier research suggested that housing association tenants, in particular working tenants, living in low cost regions in the North of England, were more likely to have the highest incidence of poor affordability. Unlike those living in high-cost regions of London and the South East, they tended to have a smaller amount of residual incomes left even though they contributed a smaller proportion of their income to rents. This study however found that on average housing association tenants in London had the same very low level of residual income as those living in the northern regions. One of the possible reasons for this may be the aftermath of the Right to Buy and large-scale voluntary transfer programme which led to increased residualisation of the sector in this region. Notwithstanding current government measures to alleviate child poverty the study also found that families with children were still at greater risk of poverty, and in particular, single parent families. Despite the limitations of the study: (a) the small sample size of the existing housing association tenants, (b) different definitions of incomes and (c) different residual income measures for two types of tenants, it was found that multiple overlapping measures of affordability are more likely to be reliable than any single measure.
Click here for the presentation slides