Private rental prices paid by tenants in Great Britain rose by 1.0% in the 12 months to April 2018; down from 1.1% in March 2018.
In England, private rental prices grew by 1.0%, Wales saw growth of 1.3% while Scotland saw rental prices increase by 0.6% in the 12 months to April 2018.
London private rental prices were unchanged in the year to April 2018, that is, a 12-month rate of 0.0%.
The IPHRP is constructed using administrative data. That is, the index makes use of data that are already collected for other purposes in order to estimate rental prices. The sources of private rental prices are Valuation Office Agency (VOA), Scottish Government (SG) and Welsh Government (WG). All three organisations deploy rental officers to collect the price paid for privately rented properties. The sources of expenditure weights are the Ministry of Housing, Communities and Local Government (MHCLG), Scottish Government, Welsh Government and the VOA. Annually, over 450,000 private rents prices are collected in England and 30,000 and 25,000 in Wales and Scotland respectively.
IPHRP is released as an Experimental Statistic. While the methodology (PDF, 2.42MB) for IPHRP is final, Northern Ireland is currently excluded from the price index. We are working with Northern Ireland Housing Executive to secure private rental data for Northern Ireland. Once the coverage of IPHRP has been improved to that of the UK, the IPHRP will be assessed against the Code of Practice for Statistics to achieve National Statistics status.
Growth in private rental prices paid by tenants in Great Britain has slowed down since the end of 2015, increasing by 1.0% in the 12 months to April 2018. For example, a property that was rented for £500 per month in April 2017, which saw its rent increase by the average rate in Great Britain, would be rented for £505 in April 2018. This slowdown in the growth in private rental prices in Great Britain is driven mainly by a slowdown in London over the same period.
The 12-month growth rate of private rental prices paid by tenants in Great Britain in April 2018 was 1.0%, down from 1.1% in March 2018. Rental prices for Great Britain excluding London increased by 1.6% in the 12 months to April 2018, unchanged since January 2018 (Figure 1). The growth rate for London (0.0%) in the 12 months to April 2018 was 1.0 percentage point below that of Great Britain, down from 0.1% in March 2018.
The Royal Institution of Chartered Surveyors (RICS) April 2018 Residential Market Survey reported that tenant demand in the three months to April was stagnant. Rental growth expectations, although still slightly positive, moderated at the three and twelve-month horizons on the back of subdued demand momentum. The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report for March that both supply and demand for rental properties increased slightly.
Between January 2011 and April 2018, private rental prices in Great Britain increased by 15.8% (Figure 2); this was strongly driven by growth in private rental prices within London. When London is excluded from these figures, private rental prices increased by 12.3% over the same period.
The annual rate of change for Wales (1.3%) in April 2018 is still marginally higher than the annual rate of change for England (1.0%) and Great Britain (1.0%). Wales showed a broad increase in its annual growth rate between July 2016 (Figure 3) and the end of 2017, but has fallen back slightly during 2018. The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report for March that tenants in Wales were worse affected by rent hikes, where 57% were affected. This may be a response to stronger rental demand in Wales as reported by ARLA.
In England, private rental prices grew by 1.0% in the 12 months to April 2018, down from 1.1% in March 2018.
Rental growth in Scotland increased by 0.6% in the 12 months to April 2018, down from 0.7% in March 2018. The historic weaker growth since mid-2016 may be due to stronger supply and weaker demand in Scotland as reported by the Association of Residential Letting Agents (ARLA).
All the countries that constitute Great Britain have experienced rises in their private rental prices since 2011 (Figure 4). Since January 2011, rental prices in England have increased more than those in Wales and Scotland.
Growth in private rental prices in London was 0.0% in the 12 months to April 2018, down from 0.1% in March 2018. The Royal Institute of Chartered Surveyors (RICS) reported in their April 2018 Residential Market Survey that expectations are still negative in London, an ongoing trend stretching back to August 2016.
Focusing on the English regions, the largest annual rental price increase was in the East Midlands (2.8%), down from 2.7% in March 2018 (Figure 5). This was followed by the South West (2.1%), unchanged from March 2018 and the East of England (1.8%), down from 1.9% in March 2018.
The lowest annual rental price increase was in London (0.0%), down from 0.1% in March 2018. It was followed by the North East (0.1%), down from 0.2% in March 2018.
Valuation Office Agency (VOA) publishes private rental market statistics. These cover the average prices paid for renting private housing in England to the level of region and local authority. The composition of the sample used for this publication varies over time and therefore makes it hard to produce reliable comparisons over different time periods. For an evaluation of our rental price indices and the growth in average private rental prices published by VOA, please see the article Explaining private rental growth (PDF, 446KB).
Ministry of Housing, Communities and Local Government (MHCLG) publishes social rent statistics. These cover average prices paid for renting both local authority and private registered provider (housing association) properties in England. These are collected from the continuous recordings of lettings and sales in social housing (CORE) and are available at regional and local authority level.
Northern Ireland Housing Executive publishes a bi-annual Summary Research Report on the Performance of the rental market in Northern Ireland. This report analyses trends in the private rental sector at district council level during a six-month period.
In addition to government sources, a number of private companies such as Countrywide, Homelet and LSL Property Services produce statistics on the private rental market. These are predominantly flow measures of private rents, whereas the Index of Private Housing Rental Prices (IPHRP) is a stock measure. More information on how these compare with IPHRP can be found in the article Comparing measures of private rental growth in the UK.
The UK House Price Index publishes average house prices and associated growth rate statistics to the level of region and local authority. Residential house price growth in Great Britain has typically been stronger than rental price growth for a number of years, with an average 12-month rate of house price inflation between January 2013 and February 2018 of 5.7%, compared with 2.0% for rental prices.
Details of the methodology used to calculate the Index of Private Housing Rental Prices (IPHRP) can be found in the July 2013 IPHRP article but this article requires some updating. In March 2015, methodological improvements were implemented to improve the matching of properties over time; this ensures that we are comparing “like with like”. These methodological improvements were presented in the January 2015 article.
In September 2015, we published an evaluation of our rental price indices against the growth in average private rental prices published by Valuation Office Agency (VOA); please see the article Explaining private rental growth (PDF, 446KB) for more information. Comparisons of IPHRP against other private rent measures can be found in the article published alongside this release.