Index of Private Housing Rental Prices, UK: April 2021

An experimental price index tracking the prices paid for renting property from private landlords in the UK. Includes measures of owner occupiers’ housing costs.

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Cyswllt:
Email Natalie Jones

Dyddiad y datganiad:
19 May 2021

Cyhoeddiad nesaf:
16 June 2021

1. Main points

  • Private rental prices paid by tenants in the UK rose by 1.2% in the 12 months to April 2021, down from 1.3% in the 12 months to March 2021.

  • Private rental prices grew by 1.2% in England, 1.6% in Wales and 1.1% in Scotland in the 12 months to April 2021.

  • The South West and the East Midlands saw the highest annual growth in private rental prices (2.3%), while London saw the lowest (0.1%).

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2. UK private rental prices

Private rental prices paid by tenants in the UK increased by 1.2% in the 12 months to April 2021, down from 1.3% in the 12 months to March 2021. For example, a property that was rented for £500.00 per month in April 2020 that had a rent increase of the average UK rate would be rented for £506.00 in April 2021.

Growth in private rental prices paid by tenants in the UK remained broadly flat between November 2019 and the end of 2020. The beginning of 2021 has seen a slowdown in rental price growth, which has been driven by prices in London.

In the 12 months to April 2021, rental prices for the UK excluding London increased by 1.8%, up from an increase of 1.7% in March 2021 (Figure 1). London private rental prices increased by 0.1% in the 12 months to April 2021, down from 0.5% in March 2021.

The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report, March 2021 that the number of new prospective tenants rose for the third month in a row, while the number of properties managed per branch decreased in March.

The Royal Institution of Chartered Surveyors' (RICS') April 2021 Residential Market Survey reported that tenant demand increased, while landlord instructions were more or less stagnant.

These supply and demand pressures can take time to feed through to the Index of Private Housing Rental Prices (IPHRP), which reflects price changes for all private rental properties rather than only newly advertised rental properties.

Focusing on the long-term trend, between January 2015 and April 2021, private rental prices in the UK increased by 10.3% (Figure 2).

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3. UK private rental growth rates by country

In England, private rental prices grew by 1.2% in the 12 months to April 2021, down from 1.3% in the 12 months to March 2021. When London is excluded from England, privately rented properties increased by 1.7% in the 12 months to April 2021, unchanged since March 2021.

Private rental prices in Wales grew by 1.6% in the 12 months to April 2021, up from 1.5% in March 2021.

Rental growth in Scotland increased by 1.1% in the 12 months to April 2021, up from 1.0% in the 12 months to March 2021. Scotland's rental growth has remained weaker than the rest of the UK since August 2016.

The annual rate of change for Northern Ireland in April 2021 (3.3%) was higher than the other countries of the UK. Northern Ireland data have been copied forward since December 2020; the next update to Northern Ireland data will be in the release published on 16 June 2021.

All UK countries experienced a rise in their private rental prices between January 2015 and April 2021.

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4. UK private rental growth by English region

Focusing on the English regions, the largest annual rental price increase in the 12 months to April 2021 was in the South West and East Midlands, both at 2.3%, with the South West down from 2.4% and the East Midlands up from 2.1% in March 2021 (Figure 5).

The lowest annual rental price growth was in London where rental prices increased by 0.1% in the 12 months to April 2021. This was followed by the East of England and the South East, both at 1.3%.

Figure 6 shows the historical 12-month percentage growth rate in the rental prices of each of the English regions.

Figure 6: London rental prices experienced larger peaks and troughs than other regions

Index of Private Housing Rental Prices percentage change over 12 months by English region, January 2007 to April 2021

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Notes:
  1. The grey line shows England’s 12-month average private rental price growth.

Download the data

In recent months, private rental price growth in London has slowed (Figure 7). London’s rental price growth in April 2021 (0.1%) is lower than any other English region. This reflects both a decrease in demand, such as remote working shifting housing preferences meaning workers no longer need to be close to their offices, and an increase in supply, such as an excess supply of rental properties as short-term lets change to long-term lets. Further commentary on these movements can be found in our previous release under Section 4.

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5. Private rental data

Index of Private Housing Rental Prices, UK: monthly estimates
Dataset | Released 19 May 2021
Rental price index historical data time series (index values and annual percentage change).

Index of Private Housing Rental Prices, UK: annual weights analysis
Dataset | Released 24 March 2021
Aggregate weights information used in the experimental Index of Private Housing Rental Prices (IPHRP).

Measures of owner occupiers' housing costs
Dataset | Released 24 March 2021
Owner occupiers' housing costs historical data time series (index values, annual percentage change and contributions to the growth rate) – payments, rental equivalence and net acquisitions.

Measures of owner occupiers' housing costs: weights analysis
Dataset | Released 24 March 2021
Aggregate inflation measure for owner occupiers' housing costs historical data time series (index values, percentage change and weights) aggregated with the Consumer Prices Index (CPI) – payments, rental equivalence and net acquisitions.

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6. Glossary

Index of Private Housing Rental Prices (IPHRP)

The Index of Private Housing Rental Prices (IPHRP) measures the change in the price tenants face when renting residential property from private landlords.

Administrative data

Administrative data are data that people have already provided to the government through day-to-day activities, for example, health records, social security payments or educational attainment information.

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7. Measuring the data

Coronavirus

We are working to ensure that the UK has the vital information needed to respond to the impact of the coronavirus (COVID-19) pandemic on our economy and society; this includes how we measure the Index of Private Housing Rental Prices (IPHRP). The price collection for this publication has not been affected.

The ONS has released a public statement on the coronavirus and the production of statistics. Specific queries should be directed to the Media Relations Office.

End of EU exit transition period

As the UK enters into a new Trade and Co-operation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision-makers have the data they need to be informed.

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available later this year. 

Future developments

Following the Digital Economy Act 2017, the ONS gained access to Valuation Office Agency (VOA) private rental microdata. We aim to re-develop the Index of Private Housing Rental Prices (IPHRP) and private rental market summary statistics (PRMS) to produce mix-adjusted average rental prices that are comparable over time and geography down to lower geographic levels, to better meet user needs.

We are continuing to make progress with the development of an improved rental price index, with more information available in our rents development plan. The development of a new index is in the final stages of internal quality assurance with technical and methodological experts. We will provide users with more details over the coming weeks. If you have any queries or feedback on these developments, please email hpi@ons.gov.uk.

Sources

The IPHRP is constructed using administrative data. This means that the index makes use of data that are already collected for other purposes to estimate rental prices. The sources of private rental prices are the VOA, Scottish Government, Welsh Government and Northern Ireland Housing Executive (NIHE). Data for Northern Ireland also include data provided by Propertynews.com. Estimates are based on a known sample rather than a census.

The sources of the annually updated expenditure weights are the Ministry of Housing, Communities and Local Government (MHCLG), Scottish Government, Welsh Government, NIHE and VOA.

The IPHRP's indices are updated on a monthly basis with the new monthly estimate. Data are indexed with January 2015 as a base year. Data for England are provided from January 2005, data for Wales from January 2009 and data for Scotland from January 2011. UK data are from January 2015.

Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the IPHRP QMI.

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8. Strengths and limitations

Strengths

The Index of Private Housing Rental Prices (IPHRP) is constructed using large administrative sources, specified in Section 7: Measuring the data. Annually, over 450,000 private rental prices are collected in England, 30,000 in Wales, 25,000 in Scotland and 15,000 in Northern Ireland.

The index does not only measure the change in newly advertised rental prices but reflects price changes for all private rental properties.

Limitations

The IPHRP is published as price indices, rather than average prices. It is also only published down to a country and regional level. While actual rental prices cannot currently be published in the IPHRP because of data access constraints, we are actively working to acquire the necessary data.

The IPHRP is released as an Experimental Statistic.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Natalie Jones
hpi@ons.gov.uk
Ffôn: +44 (0)1633 456400