Private rental prices paid by tenants in Great Britain rose by 1.4% in the 12 months to November 2017; this is down from 1.5% in October 2017.
In England, private rental prices grew by 1.4%, Wales also saw growth of 1.4% while Scotland saw rental prices increase by 0.2% in the 12 months to November 2017.
London private rental prices grew by 0.6% in the 12 months to November 2017, that is, 0.8 percentage points below the Great Britain 12-month growth rate.
On 15 June 2017, the National Statistician announced that pre-release access to Office for National Statistics publications would stop with effect from 1 July 2017. Ministers and other officials no longer receive access to the information prior to publication.
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 Department for Communities and Local Government (DCLG), 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 Official 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 1.4% in the 12 months to November 2017. For example, a property that was rented for £500 per month in November 2016, which saw its rent increase by the average rate in Great Britain, would be rented for £507 in November 2017. 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 November 2017 was 1.4%, down from 1.5% in October 2017. Rental prices for Great Britain excluding London increased by 1.8% in the 12 months to November 2017, down from 1.9% in October 2017 (Figure 1). The growth rate for London (0.6%) in the 12 months to November 2017 was 0.8 percentage points below that of Great Britain. This is the lowest annual growth in London since October 2010.
The Royal Institute of Chartered Surveyors (RICS) October 2017 Residential Market Survey reported tenant demand was little changed during the three months to October (on a seasonally adjusted basis). It further reported that rental growth projections are modestly positive for the next three months ahead. The Association of Residential Letting Agents (ARLA) report in their Private Rented Sector Report for October 2017 that supply of rental stock and demand from prospective tenants was down during the month.
Between January 2011 and November 2017, private rental prices in Great Britain increased by 15.4% (Figure 2); this was strongly driven by the historical growth in private rental prices within London. However, when London is excluded from these figures, private rental prices increased by 11.6% over the same period.
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The annual rate of change for Wales (1.4%) in November 2017 is the same as the annual rate of change for England and Great Britain (both 1.4%). Wales has shown a broad increase in its annual growth rate since July 2016 (Figure 3). The annual growth rate for England is the lowest since September 2014, when it was also 1.4%.
Rental growth in Scotland increased by 0.2% in the 12 months to November 2017, down from 0.4% in October 2017. This weaker growth 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 0.6% in the 12 months to November 2017, down from 0.8% in October 2017. The Royal Institute of Chartered Surveyors (RICS) reported in their October 2017 Residential Market Survey that London remains the only area in which 12-month rental growth projections are negative, with tenant demand still lacking momentum in the capital.
Focusing on the English regions, the largest annual rental price increases were in the East Midlands (2.7%), down from 2.9% in October 2017 (Figure 5). This was followed by the South East (2.3%), down from 2.4% in October 2017, the East of England (2.1%), unchanged from October 2017 and the South West (2.1%), also unchanged from October 2017.
The lowest annual rental price increases were in the North East (0.0%), down from 0.2% in October 2017, London (0.6%), down from 0.8% in October 2017, the North West (1.3%), unchanged from October 2017, Yorkshire and The Humber (1.6%), down from 1.7% in October 2017 and the West Midlands (1.8%), up from 1.7% in October 2017.
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.Back to table of contents