Index of Private Housing Rental Prices, UK: August 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 Ceri Lewis

Dyddiad y datganiad:
15 September 2021

Cyhoeddiad nesaf:
20 October 2021

1. Main points

  • Private rental prices paid by tenants in the UK rose by 1.3% in the 12 months to August 2021, unchanged since July 2021.
  • Private rental prices grew by 1.2% in England, 1.2% in Wales and 1.6% in Scotland in the 12 months to August 2021.
  • The East Midlands saw the highest annual growth in private rental prices (2.7%), while London saw the lowest (negative 0.4%).
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2. UK private rental prices

Private rental prices paid by tenants in the UK increased by 1.3% in the 12 months to August 2021, unchanged since July 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 saw a slowdown in rental price growth, which was driven by prices in London.

In the 12 months to August 2021, rental prices for the UK excluding London increased by 2.0%, up from an increase of 1.9% in July 2021. London private rental prices decreased by 0.4% in the 12 months to August 2021, down from a decrease of 0.1% in July 2021.

Since November 2020, private rental price growth in London has slowed. London’s rental price growth in August 2021 (negative 0.4%) is lower than any other English region. This reflects a decrease in demand, partly because of the adaptation of remote working meaning that workers no longer need to be close to their offices. It also reflects 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 March 2021 release under Section 4.

The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report, July 2021 that members reported a record high of average number of prospective tenants, breaking the previous August 2020 record. Consequently, the number of tenants experiencing rent increases rose from 60% in June to 71% in July.

The Royal Institution of Chartered Surveyors’ (RICS’) August 2021 Residential Market Survey reported that tenant demand accelerated in August, reflecting a pick-up in enquires since the previous month.

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.

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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 August 2021, unchanged since July 2021. When London is excluded from England, privately rented properties increased by 2.1% in the 12 months to August 2021, up from an increase of 2.0% in July 2021.

Private rental prices in Wales grew by 1.2% in the 12 months to August 2021, up from an increase of 1.1% in July 2021. This continues to show a slow-down in rental growth in comparison to June 2021, which was because of a base effect; rental prices in Wales grew quickly between June and July 2020.

Rental growth in Scotland increased by 1.6% in the 12 months to August 2021, up from 1.3% in the 12 months to July 2021.

The annual rate of change for Northern Ireland in August 2021 (4.3%) was higher than the other countries of the UK. Northern Ireland data have been copied forward since June 2021; the next update to Northern Ireland data will be in the release published on 15 December 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 August 2021 was in the East Midlands at 2.7%.

The lowest annual rental price growth was in London where rental prices decreased by 0.4% in the 12 months to August 2021.

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 August 2021

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Notes:

  1. The grey line shows England’s 12-month average private rental price growth.
Download the data

.xlsx

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5. Private rental data

Index of Private Housing Rental Prices, UK: monthly estimates
Dataset | Released 15 September 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 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 Office for National Statistics (ONS) has released a public statement on the coronavirus and the production of statistics. Specific queries should be directed to the Media Relations Office.

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 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.

More information and a timetable for these developments is available in the Private rental prices development plan: January 2021. 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 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 measures the change in newly advertised rental prices but also 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, and is subject to revisions if improvements in the methodology are identified. Results should be interpreted with this in mind.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Ceri Lewis
hpi@ons.gov.uk
Ffôn: +44 1633 456400