Private rental prices paid by tenants in Great Britain rose by 0.9% in the 12 months to August 2018, unchanged from the 12 months to July 2018.
In England, private rental prices grew by 0.9%, Wales saw growth of 1.0% while Scotland saw rental prices increase by 0.5% in the 12 months to August 2018.
London private rental prices decreased by 0.3% in the 12 months to August 2018; unchanged from the 12 months to July 2018.
New data show that Northern Ireland private rental prices increased by 1.7% in the 12 months to June 2018, unchanged from the 12 months to May 2018.
The Index of Private Housing Rental Prices (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.
The IPHRP is constructed using administrative data. That is, the index makes use of data that are already collected for other purposes to estimate rental prices. The sources of private rental prices are Valuation Office Agency (VOA), Scottish Government (SG) and Welsh Government (WG). All three organisations deploy rental officers to collect the price paid for privately-rented properties. Data for Northern Ireland are included in this release for the first time. The data are provided through the Northern Ireland Housing Executive (NIHE) and include data collected by their rental officers and data provided by propertynews.com. Annually, over 450,000 private rents prices are collected in England, 30,000 in Wales, 25,000 in Scotland and 15,000 in Northern Ireland. The sources of expenditure weights are the Ministry of Housing, Communities and Local Government (MHCLG), Scottish Government, Welsh Government and the VOA.
IPHRP is released as an Experimental Statistic. While the methodology for IPHRP is final, Northern Ireland data were previously excluded from the price index. We have since worked with the Northern Ireland Housing Executive to secure private rental data for Northern Ireland with initial results presented within this article. We will use this new series to improve the coverage of IPHRP to that of the UK. The IPHRP is scheduled to be assessed against the Code of Practice for Statistics in December 2018 with the aim of achieving National Statistics status for the release.Nôl i'r tabl cynnwys
Growth in private rental prices paid by tenants in Great Britain has slowed since the end of 2015, increasing by 0.9% in the 12 months to August 2018. For example, a property that was rented for £500 per month in August 2017, which saw its rent increase by the average rate in Great Britain, would be rented for £504.50 in August 2018. This slowdown in the growth in private rental prices in Great Britain is driven mainly by a slowdown in London over the same period.
The 12-month growth rate of private rental prices paid by tenants in Great Britain in August 2018 was 0.9%, unchanged from July 2018. Rental prices for Great Britain excluding London increased by 1.5% in the 12 months to August 2018, unchanged from July 2018 (Figure 1). London private rental prices fell by 0.3% in the 12 months to August 2018, also unchanged from July 2018.
The Royal Institution of Chartered Surveyors (RICS) August 2018 Residential Market Survey reported a continuing fall in new landlord instructions for the twenty-third consecutive month. RICS note that the implication of this feedback is that the supply of fresh rental stock to the market is increasingly constrained with demand remaining resilient.
Similarly, the Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report for July 2018 that the supply of rental properties decreased, with rental demand at its highest level this year. These supply and demand pressures can take time to feed through to IPHRP, which reflects price changes for all private rental properties, rather than only newly-advertised rental properties.
Between January 2011 and August 2018, private rental prices in Great Britain increased by 16.2% (Figure 2); this was strongly driven by growth in private rental prices within London. When London is excluded from these figures, private rental prices increased by 12.8% over the same period.
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The annual rate of change for Wales (1.0%) in August 2018 is still marginally higher than the annual rate of change for England (0.9%) and Great Britain (0.9%). Wales showed a broad increase in its annual growth rate between July 2016 (Figure 3) and the end of 2017 but has fallen back during 2018. This slightly stronger growth in Wales may be a response to stronger rental demand in Wales, as reported by the Association of Residential Letting Agents (ARLA) in their April 2018 report.
In England, private rental prices grew by 0.9% in the 12 months to August 2018, unchanged from July 2018. When London is excluded from England, privately-rented properties increased by 1.6% in the 12 months to August 2018.
Rental growth in Scotland increased by 0.5% in the 12 months to August 2018, unchanged from July 2018. The historic weaker growth since mid-2016 may be due to stronger supply and weaker demand in Scotland, as reported by ARLA in their Private Rented Sector Report for July 2018.
All the countries that constitute Great Britain have experienced rises in their private rental prices since 2011 (Figure 4). Since January 2011, rental prices in England have increased more than those in Wales and Scotland.
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London private rental prices fell by 0.3% in the 12 months to August 2018, unchanged from July 2018. However, the Royal Institution of Chartered Surveyors (RICS) reported in their July 2018 Residential Market Survey that expectations are now positive in the capital, for the first time since August 2016. This may feed through to the Index of Private Housing Rental Prices over time, which is a stock measure.
Focusing on the English regions, the largest annual rental price increase was in the East Midlands (2.8%), up from 2.7% in July 2018 (Figure 5). This was followed by the South West (2.1%), up from 1.9% in July 2018 and the East of England (1.9%), up from 1.8% in July 2018.
The lowest annual rental price increase was in London (negative 0.3%), unchanged from July 2018. It was followed by the North East (0.2%), up from 0.1% in July 2018.
Figure 6 shows the historical 12-month percentage growth rate in the rental prices of each of the English regions.
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When the Index of Private Housing Rental Prices was initially launched, Northern Ireland was excluded as the data were neither frequent nor timely enough and the coverage of the data only included the Belfast Metropolitan area. We have since worked with the Northern Ireland Housing Executive (NIHE) and Northern Ireland data are now available monthly, but updated quarterly. Use of Local Housing Allowance data alongside data from propertynews.com, provided through NIHE working in conjunction with Ulster University, has subsequently improved the coverage of the data to represent the whole of Northern Ireland.
Figure 7 presents the Northern Ireland rental price index from January 2015, which is the earliest this series is available. The England, Scotland and Wales series have been re-referenced to January 2015 equals 100 as a comparison. All the countries that constitute the UK have experienced rises in their private rental prices since 2015 (Figure 7).
Since January 2015, rental prices in England have increased more than those in Northern Ireland. The Northern Ireland index moves broadly in line with that of Wales and Scotland until mid-2017 but has since increased at a quicker rate. Over the period January 2015 to June 2018, Northern Ireland rental prices have increased by 3.6%, with Wales and Scotland increasing by 2.4% and 1.3% respectively.
The annual rate of change for Northern Ireland (1.7%) in June 2018 is higher than the other countries of the UK. Northern Ireland has seen an increase in its annual growth rate between the end of 2016 and the end of 2017, but has fallen back slightly during 2018.
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The Northern Ireland data are only available from January 2015. To publish estimates for the UK, the index series in the Index of Private Housing Rental Prices will be re-referenced from January 2011 equals 100 to January 2015 equals 100. This will be implemented from our next release on 17 October 2018. Growth rates are unaffected by this change. Our associated datasets will also be updated to include data for Northern Ireland and the UK from our next release on 17 October 2018.Nôl i'r tabl cynnwys
The IPHRP Quality and Methodology Information report contains important information on:
uses and users of the data
how the output was created
the quality of the output including the accuracy of the data
Private rental growth measures, a UK comparison, compares the growth in the Index of Private Housing Rental Prices to other measures of private rental growth.
Quality assurance of administrative data used in private rental housing statistics documents the administrative data sources used in the production of the Index of Private Housing Rental Prices and the quality assurance processes applied to them.Nôl i'r tabl cynnwys
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