Private rent rising at below inflation levels

Average private sector rents increased by less than the rate of inflation in the year ended December 2021, the Office for National Statistics has reported.

Rents went up by 1.8 per cent in England, 1.5 per cent in Wales and 2.3 per cent in Scotland.

The figures come from the ‘experimental’ Index of Private Housing Rental Prices, UK which tracks rents paid for private rented property regardless of whether the tenancy is new or existing. This, said ONS, provides less volatile results than simply tracking new tenancies, since this is the point at which most rent increases arise.

Growth in private rents paid in the UK remained broadly flat between November 2019 and the end of 2020, said ONS. But the beginning of 2021 saw a slight slowdown in rental price growth. This was driven by what was happening in London.

In the 12 months to December 2021, rental prices for the UK, excluding London, increased by 2.7 per cent, up from an increase of 2.5 per cent in November 2021. London private rental prices decreased by 0.1 per cent in the 12 months to December 2021, unchanged from the previous month.

London’s rental price growth in December 2021, minus 0.1 per cent, was the lowest of any of the English regions. This, said ONS, reflected a decrease in demand caused by remote working and an accompanying shift in housing preferences. Along with this change came an increase in supply partly caused by short-term lets being changed to long-term lets.

The highest rate of annual rental price increase in the English regions in was in the East Midlands at 3.3 per cent.

Private rental prices in Wales grew by 1.5 per cent in the 12 months to December 2021, down from an increase of 1.6 per cent in November 2021.

Rental growth in Scotland grew by 2.3 per cent in the 12 months to December 2021, up from an increase of 2.0 per cent in November 2021, and the highest annual growth rate since records began in 2012.

The annual rate of change for Northern Ireland in December 2021 (5.0 per cent) was higher than the other countries of the UK. Northern Ireland data have been copied forward since September 2021; the next update to Northern Ireland data will be in the release published on 23 March 2022.