Land: rural rental statistics
Building the jigsaw
6 June 2014
Gary Trent places rural rents into the bigger picture
In 2008, Julie Rugg and David Rhodes of York University Centre for Housing Policy presented a report to the Department for Communities and Local Government (DCLG). The private rented sector: its contribution and potential used a number of studies and statistics to conclude that:
"The rural private sector (PRS) in rural locations looks very different from its urban counterpart. The rural private rented sector plays a slightly more substantial role than other tenures."
The report went on to suggest that there had been little research on rural renting.
Times have changed. Is the rural PRS any better represented now? This article focuses on official rental statistics. The PRS is a complex mix of many local and specialist markets. One analogy is a continually changing jigsaw – a giant 3.8 million-piece puzzle. Even where an individual or company holds a good range of lettings, it is difficult to piece them together confidently into a picture without the remainder of the jigsaw.
Competitors' advertisements help to fill gaps and the numerous commercially produced rental indices, market reports and sentiment surveys indicate trends and average asking prices over broad areas. Each adds to an overall understanding of the market, but to build a representative picture, we have to ensure the sample brings together an evidence base representing the whole:
- the geographic distribution,
- urban and rural,
- agent and landlord-direct lettings.
There lies the challenge for the sector: bringing rental data of competing organisations together confidentially and securely under one roof.
For many years, this is exactly what Valuation Office Agency (VOA) rent officers have been doing. The agency's statutory status creates both the remit and authority to collect rental information and the independence from commercial interests generates trust. Around 12,000 letting and management agents, individual and corporate landlords, estate managers and investors contribute rental data on a purely goodwill basis. It is a private/public partnership like no other.
The current sample varies between 470,000 and 480,000 private lettings. These are rents in payment, not advertisements, which is important. The use of actual lettings and inclusion of renewals allows the VOA to build a series of the average rent paid by tenants against the average rent for new lettings alone.
Working to the Code of Practice for Official Statistics, we take a strategic and inclusive approach towards statistics development. The Residential Statistics Advisory Panel includes the DCLG, HM Treasury, housing academics and key PRS representatives. A user engagement exercise will follow later this year.
The rural PRS may be a relatively small percentage of the whole, but it remains critical to the rural communities it serves
Our experimental Private Rental Market statistics illustrate the potential. As simple rental level statistics, they present the mean, median, lower quartile, and upper quartile gross monthly rent paid for a number of bedroom categories for each local authority in England. These can be downloaded free from the Publications section of the VOA website. Regional maps illustrating median rental levels by local authority are also available. Development of our statistical methods will enable us to produce more sophisticated versions able to track changes in rental prices over time.
The VOA is also working with the Office for National Statistics (ONS). Since March 2013, statistics derived from the rental data we hold have been used in the calculation of the official measures of inflation – the Consumer Price Index (CPI) and Retail Price Index (RPI), which affect every citizen. The CPI and RPI measure the changes from month to month in the cost of a representative 'basket' of goods and services bought by consumers within the UK. Rents are one category of services within the basket. As a weighting of the basket of goods and services that make up the CPI and RPI, rents (for housing) represent 6.2% and 8.6% respectively (source: ONS, December 2013). We also provide statistics for ONS’s experimental Index of Private Housing Rental Prices, a quarterly index that tracks the prices paid for renting property from private landlords by region in Great Britain. The historical series dates back to May 2005 for England.
The rural PRS may be a relatively small percentage of the whole, but it remains critical to the rural communities it serves. It is also an essential element of the bigger picture, the PRS jigsaw. Growing the sample and developing official statistics is a symbiotic relationship – we depend on the goodwill of those working and living in the sector to be able to improve the information we can give back.
RICS members are encouraged to add the voice of the rural PRS to the debate and to let us know what you need from official statistics. If you are interested in the VOA's statistical development or contributing rental data, email Gary Trent at the VOA.