Private rental prices paid by tenants in Great Britain rose by 1.1% in the 12 months to March 2018; unchanged from February 2018.
In England, private rental prices grew by 1.1%, Wales saw growth of 1.2% while Scotland saw rental prices increase by 0.7% in the 12 months to March 2018.
London private rental prices grew by 0.1% in the 12 months to March 2018, that is, 1.0 percentage point below the Great Britain 12-month growth rate.
The Index of Private Housing Rental Prices (IPHRP) measures the change in price of renting residential property from private landlords. The index is published as a series of price indices covering Great Britain, its constituent countries and the English regions. All data presented are non-seasonally adjusted.
IPHRP measures the change in 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 measure the change in newly advertised rental prices only, 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 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.
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.Back to table of contents
Growth in private rental prices paid by tenants in Great Britain has seen signs of a slowdown since the end of 2015, increasing by 1.1% in the 12 months to March 2018. For example, a property that was rented for £500 per month in March 2017, which saw its rent increase by the average rate in Great Britain, would be rented for £505.50 in March 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 March 2018 was 1.1%, unchanged since January 2018. Rental prices for Great Britain excluding London increased by 1.6% in the 12 months to March 2018, unchanged since January 2018 (Figure 1). The growth rate for London (0.1%) in the 12 months to March 2018 was 1.0 percentage point below that of Great Britain, unchanged from February 2018.
The Royal Institution of Chartered Surveyors (RICS) March 2018 Residential Market Survey reported that tenant demand (on a seasonally adjusted basis) was unchanged for the third straight report. The Association of Residential Letting Agents (ARLA) reported in their Private Rented Sector Report for February that the supply of rental properties fell by 5% from January to February, while demand for these properties also decreased. However, a smaller proportion of tenants experienced a rent increase in February 2018 (25%) compared with February 2017 (29%) suggesting that supply pressure is only leading to modest rental growth.
Between January 2011 and March 2018, private rental prices in Great Britain increased by 15.7% (Figure 2); this was strongly driven by the historical growth in private rental prices within London. When London is excluded from these figures, private rental prices increased by 12.2% over the same period.
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In England, private rental prices grew by 1.1% in the 12 months to March 2018, unchanged from February 2018.
The annual rate of change for Wales (1.2%) in March 2018 is still marginally higher than the annual rate of change for England (1.1%) and Great Britain (1.1%). 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.
Rental growth in Scotland increased by 0.7% in the 12 months to March 2018, up from 0.4% in February 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.
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Growth in private rental prices in London was 0.1% in the 12 months to March 2018, unchanged from February 2018. The Royal Institute of Chartered Surveyors (RICS) reported in their February 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 (2.7%), up from 2.5% in February 2018 (Figure 5). This was followed by the South West (2.1%), unchanged from February 2018 and the East of England (1.9%), down from 2.1% in February 2018.
The lowest annual rental price increase was in London (0.1%), unchanged from the previous month. It was followed by the North East (0.2%), up from 0.0% in February 2018.
Figure 6 shows the historical 12-month percentage growth rate in the rental prices of each of the English regions.
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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.
The IPHRP 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
Contact details for this Statistical bulletin
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