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Comparing Rents and House Prices Recent pattern of social and private sector rents and lower quartile (LQ) house prices in England.

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Presentation on theme: "Comparing Rents and House Prices Recent pattern of social and private sector rents and lower quartile (LQ) house prices in England."— Presentation transcript:

1 Comparing Rents and House Prices Recent pattern of social and private sector rents and lower quartile (LQ) house prices in England

2 Relationship between private sector rents and house prices: England

3 Relationship between social sector rents and house prices: England

4 Relationship between rents and house prices: England The correlation coefficient (R) between private rents and LQ house prices was Private rents and house prices had a significantly strong positive relationship. R between social rents and LQ house prices was Social rents and house prices had a reasonably strong positive relationship for the observation period. Thus, social rents and private rents are significantly positively related -- R between private rents and social rents was

5 Relationship between rents and house prices: Regions Rs between social sector rents and private sector rents: local authorities across the English regions: 2002/03 to 2005/06

6 House price vs. Social and Private sectors rents : East

7 The East showed a particularly significant positive relationship (R = 0.730) between social and private sector rents. The scatter patterns of local authorities in the East showed significantly positive relationships between rents and house prices both for the social sector and the private sector. R for social = 0.697, R for private = 0.797

8 House price vs. Social and Private sectors rents : London

9 London showed a weak positive relationship (R = 0.071) between social and private sector rents. The scatter patterns of the local authorities in London showed significantly positive relationships between private rents and house prices. The relationships between social rents and house prices was weak (but positive). R for social = 0.240, R for private = 0.861

10 House price vs. Social and Private sectors rents : NE

11 The NE showed a weak positive relationship (R = 0.045) between social and private sector rents. The scatter patterns of the local authorities in the NE showed weak positive relationships between social rents and house prices. The relationship in the NE between PRIVATE rents and house prices was also weak (but positive). R for social = 0.370, R for private = 0.336

12 Discussion At the national level, there is strong relationship between rents and house prices. private sector: market discipline social sector: rent restructuring with market elements However, in London and the NE, weak positive relationships. London: social sector NE: both sectors

13 Social sector rents in London: reflecting affordability and target rent regime. Rental markets in NE: hinting that the region is affected by other determinants of rents than house prices. Need for more detailed analysis of these atypical regions? And cities within them?

14 Londons position in relationships to social rents, private rents and house price

15 Regions above/below the national rates of return for social and private sectors Social Sector Rents Private Sector Rents abovebelow above North EastEast Midlands North westWest Midlands Yorkshire and the Humber below LondonEast South East South West


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