A NEW INDEX OF HOUSE RENTS FOR GREAT BRITAIN 1874‐19131

DOIhttp://doi.org/10.1111/j.1467-9485.1959.tb00115.x
Published date01 November 1959
Date01 November 1959
A
NEW INDEX
OF
HOUSE
RENTS FOR
GREAT
BRITAIN
MOST
studies of the building cycle assign some importance to rent,
but the degree and nature of the relationship is the subject of consider-
able controversy. Writing
of
the
U.S.A.,
Long emphasised expectations
of rental incomes as a main influence on the inducement to invest in
houses, although he did not attempt to illustrate any empirical
relationships.2 W.
H.
Newman, who carried out an empirical analysis?
failed to uncover any connection between rent and the building cycle
in the
U.S.A.,
but for the
U.K.,
H.
W.
Robinson found that there
were
slight waves in the movement
of
rent about its upward linear
trend, and that these agreed well with the long cycles of residential
constr~ction.~
A
similar relationship has been
noted
by
A.
K.
Cairn-
cross who is more emphatic about the connection.s One of the reasons
for this difference
of
opinion
is
that there
is
a paucity of suitable rent
statistics over
a
long enough period. The object of this paper
is
to
present a new index
of
house rents and briefly to examine some of the
conclusions that it indicates.
The index
of
rent most commonly used in studies
of
the
U.K.
is
A.
L.
Bowley’s6 covering the period 1880-1914, and based on data in
the Second Fiscal Blue Book.‘ This series relates only to working-
class houses in London and twenty provincial cities and has, therefore,
a limited coverage. The inclusion of rates makes the index somewhat
unsuitable for many purposes, and the rather arbitrary method
of
allowing for that part of rates which arose from improved services
makes it less useful than one would like it to be.*
A
more important
objection is that the index
is
based on only six years, the estimates for
the remaining years being obtained by interpolation.
1874-1
9
13’
1
At his death in 1955,
Mr.
Weber left an uncompleted draft of
a
thesis on
British building activity. Certam parts
of
this are being edited into short
papers,
for
publication in this Journal, by
Mr.
J.
Parry Lewis, who has been
working in the same field, and
is
incorporating most
of
Mr.
Weber’s remaining
material in a
book
that will appear over their joint authorship.
ZClarence
D.
Long, Jnr.,
Building Cycles and the Theory
of
Investment,
1940, pp.
45,
54-55.
W.
H.
Newman, ‘The Building Industry and Business Cycles
’,
Journal
H.
W. Robinson,
The Economics
of
Building,
1939, pp. 126-27.
A.
K.
Cairncross,
Home and
Foreign
Investment,
1870-1913,
1953, pp.
of
Business
of
the
University
of
Chicago,
Vol.
VIII,
July
1935,
No.
3.
212-4.
A.
L.
Bowley,
Wages
and Income
in
the U.K. since
1860,
1937, p. 121.
One half
of
the rates was treated in the same manner as rent, while the
other half was assumed to be payment for increased services and amenities, and
was excluded. 232
Cd.
6955,
1913.

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