Social housing rental defies location-driven pricing of private sector

council housingLocation, location, location are often quoted as the 3 watchwords of property pricing as the area in which you choose to live has such a huge impact on the costs of buying or renting a home.

While that is true of the private market the social rental map of London offers a very different picture. Kensington and Chelsea, and Westminster are the most costly places to rent a home in the private sector. But average weekly rents for social housing are highest not in these expensive central boroughs but in Newham and Camden.

Social housing provides an affordable alternative for people who do not have the resources to buy a property or rent in the private sector. It is provided by local authorities and by Registered Social Landlords, defined as those that manage at least 1,000 homes. These can be charities or companies; most are housing associations.

Rents charged by social landlords are much lower and increases are controlled by a formula put in place by the government. Government policy for the past 15 years has been for rent convergence in social housing to ensure that similar homes in similar areas are charged at the same level. In order to achieve this it set target prices with those below the rate given some scope in the rent formula to gradually get prices up.

This more uniform approach produces a surprising rental map of London. Urbs looked at data from Registered Social Landlords gathered by the Department for Communities and Local Government. Newham and Camden emerge with the highest average price while one of the most costly areas for private rental, Kensington and Chelsea, is cheaper than Barking and Dagenham.

The data does not make clear the nature of the housing stock but tells a story of relatively level average rental pricing.

Social landlords

Using data from the Office for National Statistics in its Index of Private Property Rental Prices Urbs has previously looked at rental prices across London. The map shows a very different picture with sharp difference between monthly rental costs in central boroughs and outer areas.

Rental all prop map

In the last budget the Government revealed plans to extend the Right to Buy policy to housing association tenants, allowing them to own their rented home. While tenants who rent from Registered Social Landlords in central areas are paying similar rents to those in outer areas their properties are likely to command a much higher market value if they become part of the private housing sector.

Source data

See also

Families face the biggest premiums for renting homes in the capital

Under 40s locked out of housing market destined to be “generation rent”

Urban chic or leafy charm? Inner city rentals catch up with affluent areas