|Data collection||Private rental affordability, England|
|How compiled||Survey data|
|Geographic coverage||Regions in England|
|Related publications||Housing affordability in England and Wales
Alternative Measures of Housing Affordability
This quality and methodology information report contains information on the quality characteristics of the data, as well as the methods used to create it.
The information in this report will help you to:
understand the strengths and limitations of the data
learn about existing uses and users of the data
understand the methods used to create the data
help you to decide suitable uses for the data
reduce the risk of misusing data
Private rental affordability statistics include estimates of the percentage of income spent on private rent in regions in England; it uses household income for renters from the Family Resources Survey (FRS) and rent price information from the Private rental market summary statistics, which uses data from the Valuation Office Agency (VOA).
Private renting affordability is the first of a set of regular publications of additional measures of affordability, with the aim of providing users with further measures in addition to the Housing affordability in England and Wales publication.
For this bulletin, we deem a rental property affordable if a household would spend 30% or less of their income on rent.
For the new publication Private rental affordability, we produce estimates of the percentage of gross household income spent on rent, by private renters at a regional level in England.
For rent, data is taken from the Private rental market summary statistics release. We specifically use the quartile estimates of monthly rent dataset, broken down by region (table 1.7).
For income, we use the household income data in the Family Resources Survey, retaining only those records that are for private renters, calculating regional weighted quartile estimates.
We use weights to account for survey design and missing respondent responses in the Family Resource Survey.
We then calculate the percentage of monthly income spent on rent, by quartiles, for the English regions.
For this bulletin, we deem a property affordable if a household would spend 30% or less of their income on rent.
Uses and users
These measures of affordability are in addition to our main release, where users have been identified as the following:
central government: monitoring housing trends, supply and demand, policy-making such as schemes for first-time buyers
devolved administrations: supporting policy-making and monitoring changes at the country level, similar to those requirements of central government; also used for comparisons with wider UK policies
local government: monitoring and developing housing policies and affordability of housing to meet the current and future needs of their areas and to understand how changes and policies at the national level affect housing at the local authority level; determine the need of what type or price of property is required in the area so people can better afford housing
other private sector organisations: property investors and financial management companies may also use these data to assess affordability of investments
banks and building societies: house price and affordability statistics are used for mortgage lending to make decisions on whether to lend, how much to lend and setting interest rates; earnings data are also useful to inform mortgage lending to see how much of people's earnings are needed to spend on mortgages and how long is needed to pay them off
house builders: these users are interested in whether and where demand for new housing exists, how much people are likely to be able to afford to spend on a property in a given area and the returns received on homes built and converted
housing industry specialists: these include organisations such as larger estate agents seeking information on subnational housing affordability trends
housing bodies: these include organisations such as the Home Builders Federation and charities that carry out secondary analyses of official housing statistics
Strengths and limitations
There are strengths and limitations with the rental, income and affordability elements of these statistics.
The rental data have not been drawn from a statistically designed sample, so these statistics should be considered as only indicative of the private rental market. As such, the private rental affordability dataset should also only be treated as indicative and care should be taken when making comparisons over time. Further quality information for the rental statistics can be found in the Private rental market summary statistics release.
There are various sources of income data. A strength of the Family Resources Survey is that it allows us to differentiate between homeowners and private renters which is why we have chosen to use this source. We have used a weighted-quartiles method to approximate quartile income from this data. The weighting helps to compensate for some survey design and response bias. Further quality information for the income statistics can be found in the Family Resources Survey information page.
A limitation of the affordability calculation is that we do not adjust for property or household size. For example, whilst a one-bedroom flat in a region may be affordable for a family, it may not be suitable.
We are aware that by averaging over regional areas, this can hide differences within each region, where affordable properties may be in a different place to the households with the appropriate incomes.Back to table of contents
This section provides a range of information that describes the quality of the data and details any points that should be noted when using these statistics.
Housing affordability is an important issue as it affects almost everyone in the country. There are a number of different aspects to housing affordability dependant on the situation for each individual or household. This can be if someone is renting, looking to buy a property or currently paying a mortgage. This set of publications look at a range of different affordability measures to provide evidence for the public debate and policy decision makers.
Accuracy and reliability
The Private rental affordability estimates are subject to a margin of error as they are based on survey data. There are limitations with both the rent and income data sources and therefore the data should be treated as indicative of rental affordability.
The private rental market data have not been drawn from a statistically designed sample, so these statistics are only indicative of the private rental market. The results are not adjusted to produce statistics that are representative of the private rental property market in England. Housing Benefit claimants are excluded, so not all privately rented properties are represented in this sample.
There are no uncertainty measures available for the private rental estimates and consequently we cannot provide measure of error or confidence intervals for this output.
Coherence and comparability
Although work is currently being undertaken to redevelop private rental prices that are comparable over time and geography down to lower levels, the current output states that caution is advised comparing across years. Therefore, this also extends to these private rental affordability statistics.
The rental data for the other countries of the UK is collected on a different basis and is not directly comparable with England.
Timeliness and punctuality
We would expect this output to be published annually in Autumn, but the statistics will be lagged by a year because of data availability (so in Autumn 2021, it included data for financial year ending 2020).
The required Family Resources Survey income data is available in May but is lagged by a year (so in May 2021, data for financial year ending 2020 was available).
The financial year estimates of Private Rental Market Statistics are released in June and cover the financial year that recently ended (so in June 2021, data for financial year ending 2021 was released).Back to table of contents
The private rental affordability release takes regional monthly rental quartile estimates directly from Table 1.7 in the Private rental market summary statistics in England release.
For the income element, household data is taken from the Family Resources Survey. The data is filtered to only include monthly household income of private renters. A UK household weighting variable (Gross4) is applied to weight the observations and weighted-quartile estimates are then calculated for each region and England as a whole.
The proportion of income spent on rent is then calculated by combining these measures within each region.Back to table of contents
Contact details for this Methodology
Telephone: +44 20 3741 1789