Between ‘Market’ and ‘Welfare’: Rent Restructuring Policy in the Housing Association Sector, England

Abstract

This paper empirically evaluates the market and welfare impacts of rent restructuring policy in the housing association (RSL) sector. The focus is on the financial viability of housing associations in the north of England, the affordability problems of tenants in the south, and the changes of turnover rates of RSL tenancies that have resulted. Using data from the Regulatory and Statistical Returns and the CORE (COntinuous REcording) from 2001/02 to 2005/06, the analysis shows that the ‘market’ component of the rent formula plays a more substantial role in affecting the RSL rent levels despite the ‘welfare’ measures in the policy—the greater emphasis on local earnings, the restriction of annual rent increase and the imposition of rent ceilings. Given that social housing in England is essentially a residual mode of provision, it is argued that a more flexible approach in balancing these two conflicting principles in rent setting is needed.