Index of Private Housing Rental Prices, UK: May 2020

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

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Cyswllt:
Email Chris Jenkins

Dyddiad y datganiad:
17 June 2020

Cyhoeddiad nesaf:
15 July 2020

1. Main points

  • Private rental prices paid by tenants in the UK rose by 1.5% in the 12 months to May 2020, unchanged since April 2020.

  • Private rental prices grew by 1.5% in England, 1.2% in Wales and 0.6% in Scotland in the 12 months to May 2020.

  • London private rental prices rose by 1.2% in the 12 months to May 2020.

  • The Office for National Statistics (ONS) has released a public statement on the coronavirus (COVID-19) and the production of statistics; Section 7: Measuring the data describes the situation in relation to the Index of Private Housing Rental Prices (IPHRP).

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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 May 2020, unchanged since April 2020. For example, a property that was rented for £500.00 per month in May 2019 that had a rent increase of the average UK rate would be rented for £507.50 in May 2020.

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 growth has started to pick up since the end of 2018, driven by strengthening growth in London.

In the 12 months to May 2020, rental prices for the UK excluding London increased by 1.6%, unchanged since April 2020 (Figure 1). London private rental prices increased by 1.2% in the 12 months to May 2020.

The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report, February 2020 that demand from prospective tenants fell in February but still hit a record high for the month of February.

The Royal Institution of Chartered Surveyors’ (RICS’) May 2020 Residential Market Survey reported that tenant demand was down over the month and landlord instructions continued to fall sharply.

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 May 2020, private rental prices in the UK increased by 9.2% (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 May 2020, unchanged since April 2020. When London is excluded from England, privately rented properties increased by 1.7% in the 12 months to May 2020.

Private rental prices in Wales grew by 1.2% in the 12 months to May 2020, up from 1.0% in the 12 months to April 2020.

Rental growth in Scotland increased by 0.6% in the 12 months to May 2020, down from 0.7% in the 12 months to April 2020. Scotland's rental growth has remained weaker than that of the rest of the UK since August 2016.

The annual rate of change for Northern Ireland in May 2020 (2.6%) was higher than that of the other countries of the UK. Northern Ireland data have been copied forward since March 2020; the next update to Northern Ireland data will be in the release published on 16 September 2020. The Northern Ireland annual growth rate has remained broadly consistent (around 2%) since 2018. However, in recent months there has been an increase in the annual growth rate.

All UK countries experienced a rise in their private rental prices between January 2015 and May 2020, with rental prices in England and Northern Ireland increasing more than those in Wales and Scotland across the time series (Figure 4).

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4. UK private rental growth by English regions

The largest annual rental price increase in the 12 months to May 2020 (Figure 5) was in the South West (2.5%, down from 2.6% in April 2020) and the East Midlands (2.5%, up from 2.4% in April 2020).

The lowest annual rental price growth was in the North East where rental prices increased by 0.8% in the 12 months to May 2020, followed by the North West, which increased by 1.0%.

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 25 March 2020
Aggregate weights information used in the experimental Index of Private Housing Rental Prices (IPHRP).

Index of Private Housing Rental Prices, UK: monthly estimates
Dataset | Released 17 June 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)

The Index of Private Housing Rental Prices (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 (COVID-19)

The Office for National Statistics (ONS) is 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). At present, the price collection for this publication has been largely unaffected. A small change was made to how the data are collected in England; Tenancy Deposit Protection data has been used for less than 1% of the data in May 2020.

The ONS remains committed to providing the best and most accurate information we can, serving the public good at a time when it is needed the most. As this situation evolves, we are developing several solutions to meet potential scenarios depending on the amount of data that are able to be collected by our data suppliers, and we are considering how we produce forthcoming publications. Users will be informed of any changes to how the data are measured.

The ONS has released a public statement on COVID-19 and the production of statistics. Specific queries must be directed to the Media Relations Office.

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 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 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, 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 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 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

Chris Jenkins
hpi@ons.gov.uk
Ffôn: +44 (0)1633 456400