Index of Private Housing Rental Prices, UK: November 2019

• Private rental prices paid by tenants in the UK rose by 1.4% in the 12 months to November 2019, up from 1.3% in October 2019.

• In England, private rental prices grew by 1.4%, Wales experienced growth of 1.0%, while in Scotland private rental prices increased by 0.9% in the 12 months to November 2019.

• London private rental prices rose by 1.0% in the 12 months to November 2019.

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to November 2019, up from 1.3% in October 2019. For example, a property that was rented for £500 per month in November 2018 and saw its rent increase by the average rate in the UK would be rented for £507.00 in November 2019. Growth in private rental prices paid by tenants in the UK 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.

Rental prices for the UK excluding London increased by 1.6% in the 12 months to November 2019, up from 1.5% in October 2019 (Figure 1). London private rental prices increased by 1.0% in the 12 months to November 2019.

The Royal Institution of Chartered Surveyors' (RICS's) October 2019 UK Residential Market Survey found that demand from prospective tenants has accelerated in the three months to October 2019. Alongside this, landlord instructions continue to decline.

The Association of Residential Letting Agents (ARLA) described in their Private Rented Sector Report, October 2019 how demand from prospective tenants and the number of landlords exiting the market remained the same.

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 November 2019, private rental prices in the UK increased by 8.3% (Figure 2).

In England, private rental prices grew by 1.4% in the 12 months to November 2019, unchanged since October 2019. Excluding London from the data for England, privately rented properties increased by 1.7% in the 12 months to November 2019.

Private rental prices in Wales grew by 1.0% in the 12 months to November 2019, down from 1.2% in October 2019.

Rental growth in Scotland increased by 0.9% in the 12 months to November 2019, up from 0.7% in October 2019. The weaker growth in Scotland since 2016 may be because of stronger supply and weaker demand in Scotland, as reported by the Association of Residential Letting Agents (ARLA).

The annual rate of change for Northern Ireland (2.2%) in September 2019 is higher than for the other countries of the UK. The Northern Ireland annual growth rate has remained broadly consistent around 2% since 2018. Northern Ireland data have been copied forward since September 2019. The next update to Northern Ireland data will be in the release on 25 March 2020.

All UK countries have experienced increases in their private rental prices since 2015 (Figure 4). Since January 2015, rental prices in Northern Ireland have increased more than those in Wales, Scotland and England.

London private rental prices increased by 1.0% in the 12 months to November 2019. The Royal Institution of Chartered Surveyors (RICS) reported in their November 2018 UK Residential Market Survey that demand from prospective tenants held steady, with rents expecting to rise modestly over the 12-month horizon.

Focusing on the English regions, the largest annual rental price increase was in the South West (2.3%), up from 2.2% in October 2019 (Figure 5). This was followed by the East Midlands (2.1%), Yorkshire and The Humber (1.9%), and the South East (1.7%).

The lowest annual rental price growth was in the North East, where prices increased by 0.5%, followed by London, which increased by 1.0% in the 12 months to November 2019.

Figure 6 shows the historical 12-month percentage growth rate in the rental prices of each of the English regions.

Figure 6: London rental prices experienced greater increases and falls than other regions

Index of Private Housing Rental Prices percentage change over 12 months by English region, January 2007 to November 2019

Source: Office for National Statistics – Index of Private Housing Rental Prices

Notes:

1. The grey line shows the average England 12-month percentage change.

Download this image Figure 6: London rental prices experienced greater increases and falls than other regions

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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.

Local authority

A local authority is a geographical area with a total population of between 2,200 and 1,074,000 people.

Administrative data

Administrative data are data that people have already provided to the government.

Data sources

The Index of Private Housing Rental Prices (IPHRP) is constructed using administrative data, or data that are already collected by the government 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 the VOA.

The IPHRP's indices are updated on a monthly basis with the new monthly estimate. The data are indexed with January 2015 as a base year. Data for England are provided from January 2005, data for Wales are provided from January 2009, and data from Scotland are provided from January 2011. The 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 Index of Private Housing Rental Prices QMI.

Large administrative sources

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 rents 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.

Scope of the IPHRP

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 owing to data access constraints, we are actively working to acquire the necessary data.

The IPHRP is released as Experimental Statistics.