Index of Private Housing Rental Prices, UK: January 2020

An experimental price index tracking the prices paid for renting property from private landlords in the UK.

This has been superseded. View corrected version

Cyswllt:
Email Ceri Lewis

Dyddiad y datganiad:
19 February 2020

Cyhoeddiad nesaf:
25 March 2020

1. Main points

  • Private rental prices paid by tenants in the UK rose by 1.5% in the 12 months to January 2020, up from 1.4% in December 2019.

  • Private rental prices grew by 1.5% in England, 1.3% in Wales, and by 0.6% in Scotland in the 12 months to January 2020.

  • London private rental prices rose by 1.3% in the 12 months to January 2020.

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2. UK private rental prices

Private rental prices paid by tenants in the UK increased by 1.5% in the 12 months to January 2020, up from 1.4% in December 2019. For example, a property that was rented for £500 per month in January 2019, which had a rent increase of the average UK rate, would be rented for £507.50 in January 2020.

Growth in private rental prices paid by tenants in the UK have generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period. Rental growth has started to pick up since the end of 2018, driven by strengthening growth in London.

In the 12 months to January 2020, rental prices for the UK excluding London increased by 1.6%, up from 1.5% in December 2019 (Figure 1). London private rental prices increased by 1.3% in the 12 months to January 2020.

The Royal Institution of Chartered Surveyors’ (RICS’s) December 2019 Residential Market Survey reported that the majority of UK regions saw an increase in enquiries over the month. Alongside this, landlord instructions continued to decline.

The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report: December 2019 that demand from prospective tenants continued to fall, while the number of landlords exiting the market remained the same.

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 December 2019, private rental prices in the UK increased by 8.6% (Figure 2).

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3. UK private rental growth rates by country

In England, private rental prices grew by 1.5% in the 12 months to January 2020, up from 1.4% in December 2019. When London is excluded from England, privately rented properties increased by 1.7% in the 12 months to January 2020.

Private rental prices in Wales grew by 1.3% in the 12 months to January 2020, up from 1.2% in December 2019.

Rental growth in Scotland increased by 0.6% in the 12 months to January 2020, unchanged since December 2019. The weaker growth in Scotland since 2016 may be the result of stronger supply and weaker demand in Scotland, as reported by the Association of Residential Letting Agents (ARLA) December 2019 Report.

The annual rate of change for Northern Ireland (2.2%) in January 2020 is higher than the other countries of the UK. The Northern Ireland annual growth rate has remained broadly consistent –around 2% – since 2018. Northern Ireland data have been copied forward since September 2019. The next update to Northern Ireland data will be in the release on 25 March 2020.

All UK countries have experienced a rise in their private rental prices between January 2015 (Figure 4) and January 2020. Since January 2015, rental prices in England and Northern Ireland have increased more than those in Wales and Scotland.

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4. UK private rental growth by English regions

Focusing on the English regions, the largest annual rental price increase in the 12 months to January 2020 was in the South West at 2.3%, up from 2.2% in December 2019 (Figure 5). This was followed by the East Midlands at 2.2%.

The lowest annual rental price growth was in the North East, where prices increased by 0.6% in the 12 months to January 2020, followed by the North West, which increased by 1.1%.

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

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5. Private rental data

Index of Private Housing Rental Prices, UK: annual weights analysis
Dataset | Released 15 January 2020
Aggregate weights information used in the experimental Index of Private Housing Rental Prices.

Index of Private Housing Rental Prices, UK: monthly estimates
Dataset | Released 19 February 2020
Rental price index historical time series (index values and annual percentage change).

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6. Glossary

Index of Private Housing Rental Prices (IPHRP)

This measures the change in the price tenants face when renting residential property from private landlords.

Administrative data

These are data that people have already provided to 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

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our inflation statistics in line with the UK Statistics Authority’s Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

Sources

The Index of Private Housing Rental Prices (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 the Valuation Office Agency (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, Northern Ireland Housing Executive and the 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 Index of Private Rental Prices 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 5: Private rental data. 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 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

Ceri Lewis
hpi@ons.gov.uk
Ffôn: +44 (0)1633 456400