Index of Private Housing Rental Prices, UK: September 2023

• Private rental prices paid by tenants in the UK rose by 5.7% in the 12 months to September 2023, up from a revised 5.6% in the 12 months to August 2023.
• Annual private rental prices increased by 5.6% in England, 6.9% in Wales, and 6.0% in Scotland in the 12 months to September 2023.
• Within England, London had the highest annual percentage change in private rental prices in the 12 months to September 2023 at 6.2%, while the North East saw the lowest at 4.7%.
• London's annual percentage change in private rental prices was at its highest annual rate since the London data series began in January 2006.

UK estimates for the latest two months are provisional and subject to revision. All statistics are non-seasonally adjusted estimates, unless explicitly stated otherwise.

Private rental prices paid by tenants in the UK increased by 5.7% in the 12 months to September 2023 (provisional estimate). This represents the largest annual percentage change since this UK data series began in January 2016, and is up from 5.6% (revised estimate) in the 12 months to August 2023.

The annual inflation rate of private rental prices in the UK began to increase in the second half of 2021 (Figure 1). Annual growth was seen across all regions except London, where prices decreased. The annual percentage change in rents increased across all regions in 2022, including in London, and this has generally continued during 2023.

In the 12 months to September 2023, rental prices for the UK (excluding London) increased by 5.5% (provisional estimate). This is up from an increase of 5.4% (revised estimate) in the 12 months to August 2023. Private rental prices in London account for almost a third of UK rental expenditure, as shown in our Index of Private Housing Rental Prices, UK: annual weights analysis dataset). Private rental prices in London increased by 6.2% in the 12 months to September 2023, up from an increase of 5.9% in the 12 months to August 2023. This is the highest annual percentage change since the London data series began in January 2006.

The Royal Institution of Chartered Surveyors (RICS) reported in their September 2023 UK Residential Market Survey that tenant demand increased this month, while landlord instructions continued to highlight a scarcity of listings becoming available on the rental market. With rising demand and dwindling supply, RICS noted that rental prices are expected to increase by an extra 5.0% on average across the UK over the upcoming twelve months.

Supply and demand pressures can take time to be reflected in the Index of Private Housing Rental Prices (IPHRP). This is because the index reflects price changes for all private rental properties, rather than only newly advertised rental properties. Our Measuring rents: stock vs flow blog post explains how we measure price change in the IPHRP.

England

In England, private rental prices increased by 5.6% in the 12 months to September 2023, up from 5.4% in the 12 months to August 2023. When London is excluded from England, private rental prices increased by 5.3% in the 12 months to September 2023. The figures are the highest annual percentage changes since these data series began in January 2006.

Wales

Private rental prices in Wales increased by 6.9% in the 12 months to September 2023. This was the highest of all the countries in Great Britain and up from 6.5% in the 12 months to August 2023.

Private sector measures of annual inflation for new tenancies tends to be higher than the Index of Private Housing Rental Prices’ (IPHRP’s) stock measure during periods of rising annual price inflation. For example, Homelet’s annual inflation for new tenancies in Wales recently rose to 11.0% in the 12 months to March 2023, whereas IPHRP’s stock measure reported a substantially lower annual inflation rate of 4.4% for the same period. The recent rise in the IPHRP's annual inflation for Wales likely reflects the high annual inflation for new lets during the past year.

However, Homelet have reported four consecutive months of slowing annual inflation for new tenancies in Wales, with new let annual inflation slowing to 7.3% in the 12 months to September 2023. Meanwhile, IPHRP reports that annual inflation of the stock in Wales continues to rise, reaching 6.9% in the 12 months to September 2023. Since IPHRP measures rental price changes of the entire privately rented stock, changes in annual inflation of newly let rental prices take time to be reflected in IPHRP's measure. Our Measuring the UK housing market blog post provides more detail on the differences between stock and flow measures of rental prices.

Scotland

Private rental prices in Scotland increased by 6.0% in the 12 months to September 2023, unchanged from the price increase in the 12 months to August 2023, and remains at the highest annual rate since the Scotland data series began in January 2012. The Cost of Living (Tenant Protection) Scotland Act has capped in-tenancy rental price increases in Scotland since late 2022 (described in Section 8: Measuring the data).

The IPHRP's stock measure remains substantially below Homelet’s annual inflation of 13.3% for new tenancies in Scotland in the 12 months to September 2023. The continued rise in the IPHRP's annual inflation for Scotland since this Act was passed likely reflects the high annual inflation for new lets (which are not subject to the price cap) over the past year. This is because it feeds into IPHRP's stock measure.

Scotland rents data (underlying the IPHRP's stock measure) is mainly for advertised new lets, which are not subject to the price cap. We advise users to bear this in mind when interpreting estimates for Scotland and comparing with other UK countries.

Northern Ireland

Private rental prices in Northern Ireland increased by 9.3% in the 12 months to July 2023. The annual rate for Northern Ireland has slowed since the recent peak of 10.0% in the 12 months to March 2023. However, it still remains higher than for other UK countries. Northern Ireland data lag behind the rest of the UK and will be updated in our next Index of Private Housing Rental Prices, UK bulletin, to be published on 15 November 2023.

London’s annual rents inflation was 6.2% in the 12 months to September 2023. This was the highest out of all the English regions. The lowest was in the North East, at 4.7% in the 12 months to September 2023.

Figure 5: London rental prices experienced larger peaks and troughs than other regions

Private rental price percentage change over 12 months, by English region, January 2007 to September 2023

Notes:

1. Estimates are not seasonally adjusted. 

2. The grey line shows England's 12-month average rental price percentage change.

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Many private sector organisations, including estate agents and property companies, produce estimates of changes in rental prices. This includes Zoopla, Rightmove and HomeLet. These sources provide an extensive range of rental data, with rental measures that show a diverse picture.

Rightmove and HomeLet both reported UK annual rental price inflation was 10.1% in the 12 months to September 2023, while Zoopla reported annual inflation was 10.3% in the 12 months to August 2023. These inflation rates are much higher than the UK annual inflation estimate of 5.7% in the 12 months to September 2023, reported in our Index of Private Housing Rental Prices (IPHRP).

During 2021 and early 2022, all three private sector measures reported increasing annual private rental price inflation of newly let properties, reaching a peak in summer 2022. Between summer 2022 and spring 2023, Rightmove and Zoopla reported annual inflation of newly let rental prices was generally slowing. The trends have been uncertain in all three private sector measures since spring 2023.

Historically, the annual rental price inflation rates measured by the private sector organisations have differed to, and tend to be higher than, IPHRP estimates and some tend to be more volatile (Figure 6). This is because the private sector measures primarily focus on newly let properties (a flow measure), while the IPHRP estimates are based on a mixture of newly let properties and existing lets (a stock measure).

The Valuation Office Agency (VOA) rental officers suggest that the greatest price rises occur when properties are newly let, compared with existing tenants, who tend to see smaller price increases. Therefore, we can expect the IPHRP to be less volatile, but also to lag behind the private sector measures, as changes in rental prices from new lets can take time to feed through to the IPHRP. Our Measuring the UK housing market blog post provides more detail on the differences between stock and flow measures of rental prices.

Despite measuring the stock of rents, IPHRP has reported new record high UK annual rental price inflation for the past 18 consecutive months, reflecting the rapidly rising rental prices observed by private sector measures of new lets during 2022 and 2023. IPHRP reported increasing annual private rental price inflation from late 2021 and, as of September 2023, continues to report increasing annual rental price inflation for the entire privately rented stock.

Further information on Zoopla, Rightmove, HomeLet and Index of Private Housing Rental data sources and their differences are available in our Private rental growth measures, a UK comparison: January to December 2022 article.

Index of Private Housing Rental Prices (IPHRP)

The IPHRP measures the change in the price that 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. Examples include health records, social security payments, and educational attainment information.

Sources

The Index of Private Housing Rental Prices (IPHRP) is created 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.

The sources of the annually updated Index of Private Housing Rental Prices, UK: annual weights analysis dataset are the Department for Levelling Up, Housing and Communities (DLUHC), 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 are provided for:

• England from January 2005
• Wales from January 2009
• Scotland from January 2011
• UK from January 2015

Revision policy

Northern Ireland rental data are not available for the latest two months. To produce provisional estimates of the IPHRP and annual percentage change for the latest two months, Northern Ireland's index has been carried forward. For instance, rental price inflation has been assumed to be 0% for the latest two months. Each subsequent month, updated Northern Ireland data are used to revise estimates for the UK. This means that there is a two-month revision period for the UK series and UK (excluding London) series in the IPHRP.

Data collection

In England and Wales, data for achieved rents are collected for both new tenancies and existing tenancies. When 12 months have passed following a property's last update, rent officers receive a notification, which supports rent officer aims to revisit previous properties.

In Northern Ireland, rents data are for advertised new lets.

In Scotland, rents data are predominantly for advertised new lets. Data collection procedures do not involve actively seeking to re-collect data for previously collected properties.

In the IPHRP, assumptions on average periods between rent price increases are used to measure price inflation for the stock of rents. IPHRP methodology assumes that rental price remains constant for up to 14 months if updated rental data for that property are not available, and replaces records more than 14 months old.

Since Scotland data are predominantly new lets data, only a small proportion of Scotland data collected are based on existing lets data. This means that replacement data will be predominantly based on newly advertised rents, which are not subject to the price cap. Therefore, price changes for existing tenancies are largely estimated for Scotland.

Cost of Living (Tenant Protection) Scotland Act

The Cost of Living (Tenant Protection) Scotland Act capped in-tenancy rental price increases at 0% (and up to 3% in certain circumstances) until 31 March 2023. On 1 April 2023, this rental price increase cap was increased to 3% (and up to 6% in certain circumstances), as reported on the Scottish Government website. On 20 September 2023, Scottish Government confirmed that this rental price cap would remain in place for up to six months from October 2023. This rental price cap only applies to in-tenancy rent increases, with no restriction on rent increases for new lets.

Quality

More information on strengths, limitations, appropriate uses, and how the data were created is available in our Index of Private Housing Rental Prices Quality and Methodology Information (QMI).

Future developments

Following the Digital Economy Act 2017, the Office for National Statistics (ONS) gained access to Valuation Office Agency (VOA) private rental microdata. We aim to redevelop the IPHRP and private rental market summary statistics (PRMS) to produce mix-adjusted average rental prices that are comparable over time. We also plan to refine geography to lower geographic levels, to better meet user needs.

An overview of the methodology that we intend to use is available in our Redevelopment of private rental prices statistics, intended methodology. We will now need to spend more time ensuring the production system is developed on a strategic platform and is sustainable. This has resulted in our initial timetable being out of date. More information and a timetable for these developments (updated 6 July 2023) are available in our Private rental prices development plan: updated February 2022. If you have any queries or feedback on these developments, please email us at hpi@ons.gov.uk.

Strengths

The Index of Private Housing Rental Prices (IPHRP) is constructed using large administrative sources, specified in Section 8: 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 not only measures the change in newly advertised rental prices, but reflects price changes for all private rental properties, including for existing tenancies.

Limitations

Where collected rents data is predominantly for new lets, compositional differences between rents data and the rental sector will be larger.

The IPHRP is published as price indices, rather than average prices. It is also only published down to a country and regional level. Average rental price levels cannot currently be published in IPHRP because of data access constraints. Our Redevelopment of private rental prices statistics work aims to address this.

The IPHRP is released as Experimental Statistics and subject to revisions if improvements in the methodology are identified. Users should interpret results with this in mind.