Index of Private Housing Rental Prices, UK: January 2023

• Private rental prices paid by tenants in the UK rose by 4.4% in the 12 months to January 2023, up from 4.2% in the 12 months to December 2022.

• Annual private rental prices increased by 4.3% in England, 3.9% in Wales, and 4.5% in Scotland in the 12 months to January 2023.

• Within England, the East Midlands saw the highest annual percentage change in private rental prices in the 12 months to January 2023 (5.0%), while the West Midlands saw the lowest (3.9%).

• London's annual percentage change in private rental prices was 4.3% in the 12 months to January 2023.

Private rental prices paid by tenants in the UK increased by 4.4% in the 12 months to January 2023, representing the largest annual percentage change since this UK series began in January 2016.

The annual change in UK private rental prices paid by tenants remained steady between November 2019 and the end of 2020. The annual percentage change in rents slowed in early 2021, which was driven by the slowdown, and later reduction, of London rental prices. This may have reflected lower demand in London because of the coronavirus (COVID-19) pandemic. For example, remote working meant workers no longer needed to live close to offices, and housing preferences changed.

Private rental prices in the UK began to increase in the second half of 2021, with annual growth across all regions except London, where prices decreased. The annual percentage change in rents has increased across all regions in 2022, including in London.

In the 12 months to January 2023, rental prices for the UK (excluding London) increased by 4.4%, up from an increase of 4.3% in December 2022. Private rental prices in London increased by 4.3% in the 12 months to January 2023, up from an increase of 4.0% in December 2022. This is the strongest annual percentage change in London since August 2015.

The Royal Institution of Chartered Surveyors (RICS) reported in their UK Residential Market Survey that tenant demand increased over the month. However, this is the least elevated reading since February 2021, and suggests that the pace of demand growth is softening across the rental market. On the supply side, new landlord instructions remain on a downward trend, so near-term expectations continue to point towards rents being squeezed higher.

Supply and demand pressures can take time to feed through to the Index of Private Housing Rental Prices (IPHRP). This is because the Index reflects price changes for all private rental properties, rather than only newly advertised rental properties. Our Measuring rents: stock vs flow blog post explains how we measure price change in the IPHRP.

In England, private rental prices increased by 4.3% in the 12 months to January 2023. When London is excluded from England, private rental prices increased by 4.3% in the 12 months to January 2023. Both of these figures reflect the highest annual percentage change since these England series began in January 2006.

Private rental prices in Wales increased by 3.9% in the 12 months to January 2023. This is up from an increase of 3.5% in December 2022, and is the highest annual percentage change since this Wales series began in January 2010.

Private rental prices in Scotland increased by 4.5% in the 12 months to January 2023. This is up from an increase of 4.4% in December 2022, and is the highest annual percentage change since this Scotland series began in January 2012.

The annual percentage change for Northern Ireland in January 2022 was 9.2%. This was higher than the other countries of the UK. Northern Ireland data have been carried forward since November 2022. Northern Ireland data will be updated in our Index of Private Housing Rental Prices, UK bulletin to be published on 22 March 2023.

Focusing on the English regions, the largest annual rental price percentage change in the 12 months to January 2023 was in the East Midlands at 5.0%. The East Midlands was also the region where private rental prices were rising at the fastest annual rate throughout 2022.

Of the English regions, the lowest annual rental price percentage change in the 12 months to January 2023 was in the West Midlands at 3.9%.

Figure 5: 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 January 2023

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Notes:

1. The grey line shows England's 12-month average rental price percentage change

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Index of Private Housing Rental Prices (IPHRP)

The IPHRP measures the change in the price that 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.

Economic statistics governance after Brexit

More information regarding the new governance following UK's exit from the EU is available in our previous release.

Future developments

Following the Digital Economy Act 2017, the Office for National Statistics (ONS) gained access to Valuation Office Agency (VOA) private rental microdata. We aim to redevelop 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. We also aim to refine geography to lower geographic levels, to better meet user needs.

An overview of the methodology that we intend to use is available in our article, The redevelopment of private rental prices statistics, intended methodology. We will now need to spend more time ensuring the production system is developed on a strategic platform and is sustainable. This has resulted in our initial timetable being out of date. More information and an updated timetable for these developments is available in our Private rental prices development plan: updated February 2022. If you have any queries or feedback on these developments, please email hpi@ons.gov.uk.

Sources

The IPHRP is created 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.

The sources of the annually updated Index of Private Housing Rental Prices, UK: annual weights analysis dataset are the Department for Levelling Up, Housing and Communities (DLUHC), 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 information on strengths, limitations, appropriate uses, and how the data were created is available in our Index of Private Housing Rental Prices Quality and Methodology Information (QMI).

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 not only measures 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 Experimental Statistics, and is subject to revisions if improvements in the methodology are identified. Results should be interpreted with this in mind.