WRITTEN QUESTION E-3296/96 by José García-Margallo y Marfil (PPE) to the Commission (5 December 1996)

Subject: Criteria for assessing property-derived income for GDP purposes

The media are increasingly reflecting the current difficulty of obtaining universally accepted statistics.

On what basis is imputed revenue deriving from property in real estate taken into account for the purposes of calculating GDP in the UK?

Joint answer to Written Questions E-3282/96, E-3283/96, E-3284/96, E-3285/96, E-3286/96, E-3287/96, E-3288/96, E-3289/96, E-3290/96, E-3291/96, E-3292/96, E-3293/96, E-3294/96, E-3295/96, E-3296/96 and E-3297/96 given by Mr de Silguy on behalf of the Commission (27 January 1997)

The calculation of imputed rents will soon be completely harmonized in the Community. In 1995 Commission Decision 95/309/EC ((OJ L 186, 5.8.1995. )) specifying the principles implementing Article 1 of Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices ((OJ L 49, 21.2.1989. )) (GNP Directive), which was the result of some years of reflection and discussion with the Member States statistical offices. The Decision is part of the work of harmonisation undertaken to implement the GNP Directive. This work will culminate at the end of 1998, when all the differences in the statistical principles and methods between Member States should be eliminated and the new European system of accounts (ESA 95) will be put into use in national accounts.

Under the common principles of estimation of imputed rents laid down by the Decision, the imputed rent of an owner-occupied dwelling should be measured by the actual market rent of a similar dwelling. In order to implement the concept of similarity contained in the ESA of 1979, the Decision introduces a number of statistical principles of estimation constituting the stratification method. To get an estimate of imputed rents, this method combines information from the total housing stock, broken down by various strata, with information on actual rents paid in each stratum. The Decision provides a series of steps leading to an estimate of imputed rents based on the actual rents of similar dwellings. The first step consists in breaking down the housing stock according to a number of variables, such as size, environmental characteristics, facilities, and socio-economic factors. As a result, a minimum of 30 different strata are identified. The second step is the sample estimation of an average rent for each stratum. In the last step, this rent is then imputed to the owner-occupied dwellings of the same stratum. Besides, the Decision lays down other principles covering the estimation of housing services in special cases (such as empty dwellings or holiday homes) and the extrapolation of estimates from base years. Finally, the Decision covers the treatment of intermediate consumption and that of transactions with the rest of the world.

Article 2 of the Decision provides that the estimation of dwelling services in accordance with its principles are to be submitted to the Commission no later than 30 September 1996. Therefore, the figures for GNP communicated in October 1996 by Member States should reflect the adoption of the harmonized principles. The methodology used by Member States is presently under examination.