Dataspring News

Affordability of housing association rents in England

The measure of affordability illustrated is:

Average weekly housing association rents for two bedroom properties as a proportion of lower quartile weekly earnings for 2004/05.

Two bedroom properties are used as an example as they form the largest proportion of housing association stock.

Sources: Regulatory and Statistical Return 2005; Annual Survey of Hours and Earnings 2004/05 (for all employees by postcode of residence).

National and regional average housing association rents and lower quartile earnings

The bars in Figure 1 show the regional average weekly gross rents for two bedroom properties. The line depicts the regional average rent as a proportion of regional lower quartile (LQ) earnings. The regions are ordered in ascending order of rent to earnings ratio.

The national (England) average weekly gross rent for two bedroom dwellings at 31 March 2005 is £62.96 and the average rent to lower quartile earnings ratio is 0.29.

Variation within the regions

The map (on the following page) shows the spatial pattern of affordability by grouping the affordability ratio for each local authority area into four quartiles. The lightest shading marks the lowest quartile i.e. those 87 local authorities with the lowest ratios, and the darkest shading marks those with the 87 highest ratios. Data are missing for 6 local authorities (from a total of 354), because the earnings data are not available for 2004/05 in the Annual Survey of Hours and Earnings.

The range of rent to earnings ratios within each quartile is given in the key to the map. (There appears to be some overlap between the quartiles, but this is due to the rounding of the ratios to two decimal places.)

Table 1 helps to identify the patterns illustrated in the map. It shows the proportion of local authority areas that fall into each of the four quartiles of affordability for two bedroom properties by region. (Percentages sum to 100 across the rows.)

The regions in Table 1 are in ascending order of rent to earnings ratio (as in Figure 1). The data indicate a degree of variability within some of the regions. For example, Yorkshire and the Humber has the lowest regional rent to earnings ratio, but more than half of its local authorities have rent to earnings ratios that fall in the top two quartiles (33.3% in quartile 3 and 28.6% in quartile 4).

The South West earnings are particularly low in relation to the high level of house prices in the area.

Table 1: Ratio of average housing association rents for two bedroom properties to lower quartile earnings for 2004/05: percentage of local authorities within each quartile of the distribution, by region

 

Average housing rents and lower quartile earnings: 1998/99 to 2004/05

The bars in Figure 2 show the average weekly gross rents for two bedroom properties for the period 1998/99 to 2004/05. The line depicts the average rent as a proportion of the lower quartile earnings for England. The data indicate an improvement in affordability over the last seven years.