Measuring the affordability of housing association rents in England: a dual approach

Connie P.Y. Tang

International Journal of Housing Markets and Analysis, 2012, vol. 5, issue 3, 218-234

Abstract: Purpose - The purpose of this paper is to compare relative levels of rental affordability across the English housing association sector. Design/methodology/approach - A total of two methods, rent‐to‐income ratio and residual income standards (poverty‐line and budget standard), are used to maximise their strengths and complement their weaknesses in measuring rental affordability. Findings - The rent‐to‐income ratio analysis identified that housing association rents were generally affordable. However, the residual income analyses using two different minimum acceptable standards suggested some scepticism in this regard. In particular, both analyses confirmed the affordability problem in London where nearly half of existing housing association tenants had disposable household incomes that were well below the poverty‐line as well as the largest rent‐to‐income ratio. Both analyses also confirmed that lone parents were more likely than average households to have an affordability problem. Research limitations/implications - The main limitations of this study are the small sample size of existing housing association tenants and different definitions of incomes, and subsequently different residual income measures for existing and new tenants. However, this study demonstrates that when examining the affordability of housing for the poorest households, multiple overlapping measures of affordability are likely to be more reliable than any single measure. Originality/value - The paper is an empirical attempt to use a combination of two affordability measures to examine the affordability problem of social tenants in the English housing association sector. It is also unusual in the scientific literature to use different data sources to obtain household incomes for different types of housing association tenants.

Keywords: Budget standard; Poverty‐line; Rent‐to‐income ratio; Residual income; Social rents; Income; Rental value; England (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:v:5:y:2012:i:3:p:218-234

DOI: 10.1108/17538271211243571

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