BRMA Market Evidence & Calculations: FOI release

Information requested

The market evidence data on private rents that is used to determine the LHA and BRMA 30th Percentile, as set out in the stated methodology - "The data collected includes a minimum level of address, property attributes and tenancy details". (https://www.gov.scot/publications/private-sector-rentstatistics-scotland-2010-2021/pages/32/). The data for all BRMA areas and years would be preferable.

You also request the calculation used to determine the 30th percentile figures.

Response

The data set is captured and published at Broad Rental Market Area (BRMA) level and encompasses the BRMA, postcode, the net rent, the payment frequency, property type, dwelling type and LHA type by category. The five property size categories are: CAT A is one bedroom shared, CAT B is one bedroom, CAT C is two bedroom, CAT D is three bedroom and CAT E is four bedroom. I have provided all available market evidence records used to determine LHA rates held by Rent Service Scotland covering the period 2010-2021. Please find the attached file containing the market evidence data on private rents which I will send under separate cover due to the excessive size of the file attachment.

You also requested the calculation used to determine the 30th percentile figures.

The 30th percentile figures are derived from twelve months’ worth of lettings information, collected from 1 October to 30 September in the previous year. This means that in each BRMA, if there were 100 properties available for letting of the appropriate size, the LHA would be based on the 30th lowest rent charge of those 100 properties. In other words tenants who receive LHA should have access to the bottom 30% of the market. The 30th percentile is calculated by ordering the values of rent from lowest to highest, and selecting the value at the 30% mark (e.g. the 30th number in a list of 100). Where the 30th percentile falls between two numbers, these figures are averaged.

Statistical software is used to calculate percentiles, and a fuller mathematical explanation is available for SAS (default method) and for the R Package Quantile (Type 2).

For context I have included the below information on how LHA rates were set and included links to the annual uprating LHA rate webpages as the LHA rate is not always the same amount as the 30th percentile. LHA came into effect nationally from April 2008 and rates were set at the 50th percentile of market rents. In 2011 rates were set to the 30th percentile. In 2013 LHA rate increases were limited and set to the lower of the 30th percentile or a CPI increase. In 2014 Targeted Affordability Funding (TAF) was introduced to a small number of rates determined by DWP which had deviated the most from the 30th percentile. In the Autumn Statement 2012, the UK Government announced that in 2014/15 and 2015/16, LHA rates would be uprated by 1 per cent rather than by CPI. In addition, the UK Government announced that 30% of the savings realised from this measure (based on Autumn Statement 2012 forecasts) would be used to increase LHA rates by more than 1 per cent in areas where accommodation was at risk of becoming unaffordable. This freeze was in place for 4 years. From 2016 to 2020 LHA rates have either been frozen or reduced to the 30th percentile. For 2020/21 uprating the Secretary of State for Work and Pensions laid the Rent Officers Order 2020 on 13th January 2020 in Westminster making amendments to the LHA uprating to end the 4 year freeze, and deliver on the UK Government manifesto commitment to end the benefit freeze. The rates increased by CPI of 1.7% as of September 2019, up to a maximum of the 30th percentile of rents in the Private Rented Sector.

However Coronavirus emergency legislation was laid in March 2020 which set all rates at the 30th percentile and resulted in 89% of rates increasing to the 30th PC. New rates for 2020/21 were published in March 2020. This Order froze the current rates in cash terms at the 30th percentile of market rents last determined on 31st March 2020. This continued for the determination of LHA rates for 2021/22 and 2022/23 with rates frozen in cash terms at the 30th percentile of market rents last determined on 31st March 2020.

I have included the web links below.

• Local Housing Allowance Figures (webarchive.org.uk)
• Local Housing Allowance rates - gov.scot (www.gov.scot)
• Local Housing Allowance rates 2017-2018 - gov.scot (www.gov.scot)
• Local Housing Allowance rates 2018-2019 - gov.scot (www.gov.scot)
• Local Housing Allowance Rates: 2019-2020 - gov.scot (www.gov.scot)
• Local Housing Allowance Rates: 2020-2021 - gov.scot (www.gov.scot)
• Local Housing Allowance Rates: 2021-2022 - gov.scot (www.gov.scot)
• Local Housing Allowance Rates: 2022-2023 - gov.scot (www.gov.scot)

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.

FOI 202200303624 - Information Released - BRMA 2010-2015

File type

Excel document

File size

4.7 MB

FOI 202200303624 - Information Released - BRMA 2016-2021

File type

Excel document

File size

5.5 MB