Table A3.1 is obtained from a linear OLS (Ordinary Least Squares) regression where private sector annual market rental payments, taken from the 2017/18 EHS, are regressed on regional house prices, disaggregated by property type, and a series of control variables representing the characteristics of the households, since rents reflect demand as well as supply. Among these characteristics is the length of time the household has lived in the property. Non-market rents are excluded from the sample. Data cover five Government Office Regions across the country – South East, South West, London, East Midlands and North East.

As expected, the table shows that there is a statistically significant relationship between rents and house prices in order to maintain the rental yield. But rents are also sensitive to household size and composition, the size of the property, income and employment status. The table shows that relative to households who have lived in the property for less than one year (which is the excluded category), rents are lower the longer the household has been in residence. In fact, the results suggest that rents are noticeably lower for those who have lived in the property for more than 30 years but, in practice, few households (seven) fall into this category.

Similar results are obtained using EHS data for 2015/16.