The spatial pattern of target rents and their relationship with actual rents, 2002/03

This Briefing Paper describes the spatial pattern of target rents across England and the extent to which target rents differ from actual rents. It also assesses whether the patterns vary across property sizes and across HA size, as well as across regions and districts. • Target rents are highest in London and above the national average of £60.44 per week in the South East and the East of England. The lowest target rents, below £50 per week, are in the North East and Yorkshire and Humberside. These figures are based on data provided by housing associations to the Housing Corporation in March 2003. • The range of average target rents across districts within each region is highest in the South East, followed by the South West and London. There is a particularly narrow range in Merseyside. • Average regional target rents are higher than actual rents in all regions except the South West. • In London and the South East the range of target rents across all districts is significantly wider than the range for actual rents, whereas in the East Midlands, East of England and Yorkshire and the Humber, the range is narrower. • Looking at two bedroom dwellings – the largest and most typical size-in over 40% of cases (defined as the average district rent for each HA) rents need to change by more than 10% if target rents are to be achieved. In London and Merseyside actual rents will need to increase by more than 10% to meet target in 56% and 34.5% of cases respectively. In the South West and the East Midlands actual rents will need to decrease by more than 10% in over 30% of all cases. • The proportion of cases requiring increases of over 10% is greatest for smaller dwellings – particularly bed sits (44.7%) and decline consistently with increasing property size. The opposite is generally true for required reductions of over 10%. • The need for rent reductions is concentrated in larger (5,000 units plus) HAs, while the need for increases are relatively evenly spread among different sizes of HA. • In 58% of all cases average actual rents are already within ±10% of average target rents. A change in rent of ten percent is only about three years' worth of allowed change in individual property rents. Therefore there should be no 2 problem in achieving rent restructuring over a ten-year …