Private residential rental prices up across the UK, new index shows
Private residential rental prices paid by tenants in the UK rose by 1.2% in the 12 months to August 2013, according to a new index from the Office of National Statistics.
Excluding London, were rents are higher than the rest of the country, rental prices were up by 0.8% during the same period, the data also shows.
There were also regional variations with rental prices up by 1.3% in Scotland and Wales and by 1.1% in England. But within England rental prices were up 1.9% in London and 1.1% in the South East of England.
The Index of Private Housing Rental Prices (IPHRP) is a new experimental index that measures the change in price of renting residential property from private landlords and calculates changes in the prices paid by tenants for renting private housing instead of calculating changes in the latest agreed rental prices.
The index examines how much tenants in privately rented accommodation pay in a month compared to the same month in the previous year. ‘This is a new official statistic undergoing evaluation and therefore it is recommended that caution is exercised when drawing conclusions from the published data as the index is likely to be further developed,’ said an ONS spokesman.
The index report says that the large weight that London has in the overall data reflects its high average rental prices and its large volume of private rented property.
All the regions in the UK have experienced rises in their private rental prices since 2011 and since January 2011 England rental prices have increased more than those of Scotland and Wales.
Until April 2013, the annual rate of change in the IPHRP had been higher in England than in Scotland or Wales. However, the annual rate of change has been increasing in Wales and Scotland since late 2012 and is, in August 2013, higher in these countries than in England.
The IPHRP series for England starts in 2005. Private rental prices in England show three distinct periods: rental price increases from January 2006 until November 2009, rental price decreases from December 2009 to November 2010, and increasing rental prices from December 2010 onwards. Of these three periods, 2008 showed the largest rental price increases.
When London is excluded, England shows a similar pattern but with slower rental price increases. Since the beginning of 2012 English rental price increases have been stable at between 1.1% and 1.5% year on year, with August 2013 rental prices being 1.1% higher than August 2012 rental prices.
Excluding London, England showed an increase of 0.7% for the same period. From August 2012 to August 2013 private rental prices increased in the nine English regions.
The data also shows that rental price increases have been stronger in London and the South East than the rest of England since January 2011.
The figures highlight the heat building in the London market, according to Jonathan Hopper, managing director of property finders, Garrington. ‘During the Autumn we are expecting to see increasing pressure from those wanting to rent as supply tightens leading to a further firming of rental prices,’ he said.
Article courtesy of Property Wire