Index of Private Housing Rental Prices, UK: March 2019

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

This is not the latest release. View latest release

Cyswllt:
Email Rhys Lewis

Dyddiad y datganiad:
17 April 2019

Cyhoeddiad nesaf:
22 May 2019

1. Main points

  • Private rental prices paid by tenants in the UK rose by 1.2% in the 12 months to March 2019, up from 1.1% in February 2019.

  • In England, private rental prices grew by 1.2%, Wales experienced growth of 1.1%, while in Scotland private rental prices increased by 0.7% in the 12 months to March 2019.

  • London private rental prices rose by 0.5% in the 12 months to March 2019, up from 0.2% in February 2019.

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2. Things you need to know about this release

The Index of Private Housing Rental Prices (IPHRP) measures the change in the 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 only measure the change in newly advertised rental prices, 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), Welsh Government (WG) and Northern Ireland Housing Executive (NIHE). All these organisations deploy rental officers to collect the price paid for privately rented properties. Data for Northern Ireland also include 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, the Northern Ireland Housing Executive 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 results first published in our August 2018 release on 19 September 2018. We have also used these data to improve the coverage of IPHRP to that of the UK, which was published for the first time in our September 2018 release on 17 October 2018.

The IPHRP is scheduled to be assessed against the Code of Practice for Statistics in early 2019 with the aim of achieving National Statistics status for the release.

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3. UK private rental prices growth rate strengthens

Private rental prices paid by tenants in the UK increased by 1.2% in the 12 months to March 2019, up from 1.1% in February 2019. For example, a property that was rented for £500 per month in March 2018, which saw its rent increase by the average rate in the UK, would be rented for £506 in March 2019. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental prices for the UK excluding London increased by 1.5% in the 12 months to March 2019, unchanged from February 2019 (Figure 1). London private rental prices increased by 0.5% in the 12 months to March 2019; up from 0.2% in February 2019.

The Royal Institution of Chartered Surveyors’ (RICS’s) March 2019 Residential Market Survey reported that tenant demand continued to rise for a third successive month (non-seasonally adjusted series), while new landlord instructions slipped further, remaining in negative territory for the 30th successive month.

The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report for February 2019 that the supply of rental properties remained the same and demand from prospective renters decreased compared with 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.

Focusing on the long-term trend, between January 2015 and March 2019, private rental prices in the UK increased by 7.3% (Figure 2).

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4. How do growth rates compare at the country level?

In England, private rental prices grew by 1.2% in the 12 months to March 2019, up from 1.1% in February 2019. When London is excluded from England, privately rented properties increased by 1.6% in the 12 months to March 2019.

Private rental prices in Wales grew by 1.1% in the 12 months to March 2019, unchanged from February 2019. Wales’ annual rental growth rate has been strengthening again since October 2018.

Rental growth in Scotland increased by 0.7% in the 12 months to March 2019, unchanged from February 2019. The weaker growth since 2016 may be due to stronger supply and weaker demand in Scotland, as reported by the Association of Residential Letting Agents (ARLA).

The annual rate of change for Northern Ireland (2.0%) in December 2018 was higher than the other countries of the UK. The Northern Ireland annual growth rate remained broadly consistent at around 2% throughout 2018. Northern Ireland data have been copied forward since December 2018. The next update to Northern Ireland data will be in the release on 19 June 2019.

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

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5. London private rental prices on the rise

London private rental prices increased by 0.5% in the 12 months to March 2019, up from 0.2% in the 12 months to February 2019, its highest annual growth since November 2017. The Royal Institution of Chartered Surveyors (RICS) reported in their September 2018 Residential Market Survey that tenant demand has staged a sustained recovery in London over recent months, increasingly outstripping supply. These effects may be now starting to feed through to the Index of Private Housing Rental Prices.

Focusing on the English regions, the largest annual rental price increase was in the East Midlands (2.3%), down 0.1% from February 2019 (Figure 5). This was followed by Yorkshire and The Humber (1.8%), unchanged from February 2019, and the South West (1.7%), down 0.1% from February 2019.

The lowest annual rental price growth was in the North East where prices increased by 0.3%, unchanged from February 2019. It was followed by London, which increased by 0.5%, up from 0.2% in February 2019.

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

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7. Quality and methodology

The Index of Private Housing Rental Prices Quality and Methodology Information report contains important information on:

  • the strengths and limitations of the data and how it compares with related data

  • 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.

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