Index of Private Housing Rental Prices, Great Britain: January to March 2015

• Private rental prices paid by tenants in Great Britain rose by 2.1% in the 12 months to March 2015

• Private rental prices grew by 2.1% in England, 2.1% in Scotland and 0.8% in Wales in the 12 months to March 2015

• Rental prices increased in all the English regions over the year to March 2015, with rental prices increasing the most in London (3.2%)

The Index of Private Housing Rental Prices (IPHRP) measures the change in price of renting residential property from private landlords. The index is published as a series of price indices covering Great Britain, its constituent countries and the English regions.

IPHRP measures the change in price tenants face when renting residential property from private landlords, thereby allowing a comparison between the prices tenants are charged in the current month as opposed to the same month in the previous year. The index does not measure the change in newly advertised rental prices only, but reflects price changes for all private rental properties.

IPHRP is released as an experimental statistic. This is a new official statistic undergoing evaluation and therefore it is recommended that caution is exercised when drawing conclusions from the published data as the index is likely to be further developed. Once the methodology is tested and assessed, and the publication meets user needs, the IPHRP will be assessed against the Code of Practice for Official Statistics to achieve National Statistic status. A complete description of the methodology and the sources used is included in the article Index of Private Housing Rental Prices - Historical Series. Further details regarding improvements to the IPHRP price collection methodology can be found in the January 2015 article.

The IPHRP is constructed using administrative data. That is, the index makes use of data that are already collected for other purposes in order to estimate rental prices. The sources of private rental prices are Valuation Office Agency (VOA), Scottish Government and Welsh Government. All three organisations deploy rental officers to collect the price paid for privately rented properties. The sources of expenditure weights are Department for Communities and Local Government (DCLG), Scottish Government, Welsh Government and VOA. DCLG produces estimates of the private rental dwelling stock for England and its regions. Scottish Government and Welsh Government produce estimates of private rental dwelling stock for Scotland and Wales.

The Great Britain private rental price series starts in January 2011. This is the date for which all the sources for constituting countries are available on a consistent basis. This index has seen small and gradual increases since January 2011 (Figure 1).

Between March 2014 and March 2015, Great Britain private rental prices grew by 2.1%. For example, a property that was rented for £500 a month in March 2014, which saw its rent increase by the Great Britain average rate, would be rented for £510.50 in March 2015. Rental prices for Great Britain excluding London grew by 1.5% in the same period (Figure 2).

All the countries that constitute Great Britain have experienced rises in their private rental prices since 2011 (Figure 3). Since January 2011, England rental prices have increased more than those of Scotland and Wales.

The annual rate of change in the IPHRP for Wales continues to be below that of England, Scotland and the Great Britain average (Figure 4).

Between March 2014 and March 2015, rental prices grew by 2.1% in England, 2.1% in Scotland and 0.8% in Wales (Figure 5).

The IPHRP series for England starts in 2005. Private rental prices in England show 3 distinct periods: rental price increases from January 2006 until October 2009, rental price decreases from December 2009 to October 2010, and increasing rental prices from November 2010 onwards (Figure 6). Of these 3 periods, 2008 showed the largest rental price increases. When London is excluded, England shows a similar pattern but with slower rental price increases from around January 2011.

Figure 7 shows the historical 12 month percentage growth rate in the rental prices of each of the English regions.

Figure 7: IPHRP percentage change over 12 months by English region, January 2006 to March 2015

12 month % change

Source: Office for National Statistics

Notes:

1. The dotted grey line shows the average England 12 month percentage change.
2. Not seasonally adjusted.

Download this image Figure 7: IPHRP percentage change over 12 months by English region, January 2006 to March 2015

.png (31.6 kB) .xls (53.8 kB)

Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3.0% year-on-year, with March 2015 rental prices being 2.1% higher than March 2014 rental prices (Figure 8). Excluding London, England showed an increase of 1.5% for the same period.

In the 12 months to March 2015, private rental prices increased in each of the nine English regions (Figure 9). The largest annual rental price increases were in London (3.2%) followed by the South East (2.3) and the East (1.9%). Rental price increases have been stronger in London than the rest of England since about January 2011.

We would welcome your views on the data presented in this statistical bulletin. Please contact the Housing Market Indices team using the email address below to discuss any aspect of the data, including your views on how we can improve the data.

hpi@ons.gov.uk

The IPHRP reference (170.5 Kb Excel sheet) table provides full historical series for the tables accompanying the IPHRP statistical bulletin. This month, the tables have been updated with the latest monthly estimates for January, February and March 2015.