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Target rents in relation to market levels

This paper looks at housing association target rents and how they differ from private sector rents, in an attempt to capture the extent to which affordability is delivered by the target rents.

Target net rents for housing association properties were based on a mix of local earnings and individual property values. Although the formula was based on a 30:70 split, in absolute value terms the relative importance of capital values increased with market rents. 

The average net rent was originally set in 2000 and increased each year by the guideline of RPI+1% to 2002 and RPI +½ % thereafter. For these reasons it might be expected that over the years there might be increasing differences between target rents and observed market rents. This paper examines this question as well as providing a detailed description of how target and actual rents differ from one another by size and location.

Authors

Publication Date

19th December 2009