Private Sector Rents Rise By 1% Over Last 12 Months
New data published by the Office for National Statistics (ONS) suggest that private sector rents are rising below the level of average earnings for first time in many years, bringing some good news for tenants.
According to the ONS, in the 12 months to September 2014, private rental sector rental prices increased by:
- 1% in England
- 4% in Scotland
- 2% in Wales
The ONS say that the UK’s underlying annual earnings growth increased by 1.2% in the year to August, up from 0.5% recorded in April 2014.It will be no surprise that London saw the biggest rise in PRS rental prices, at 1.5% in the 12 months to September, but the rate of rent increase has been falling steadily since the 2.5% peak was reached in September 2012.
The lowest PRS rent increases were recorded in the North West, at just 0.3% over the past 12 months.
The ONS began collecting data on private rented sector rental prices across the UK in January 2011, and since then average PRS rents have risen by:
- 5% in total in England
- 1% in Scotland
- 8% in Wales
The ONS private sector rents data is in contrast with the data published by LSL property services, owners of the UK’s largest lettings agent network, Your Move and Reeds Rains, who reported earlier this month that UK private sector rents reached a new high in September, although they also said the rate of private sector rent increases were slowing.
According to the LSL property data, average rents hit an all time record high of £768 (GBP) a month across England & Wales. But the pace of annual increases fell to 1.5% in September, down from 2.4% the month before.
However, the same data suggests that average PRS rents have increased by as much as 20% in London since 2011, and rents have increased by an average of 12.6% in England and Wales, which are much higher than the figures published by the ONS.
Director of LSL property services, David Newnes, said: “Historically rent rises have broadly tracked inflation. And as the wider cost of living grows ever more slowly, so too has the cost of renting a home. Landlords predict slower private sector rent rises to continue for at least a year. The latest LSL Landlord Survey shows expected rent rises of just 1.8% over the next twelve months, below the target rate of inflation.”
Before portfolio landlords rush out to acquire more rental properties it is worth mentioning that these average private sector rent figures should be treated with caution as data can be manipulated to suit different purposes and property investors should always conduct thorough due diligence before they agree to buy any investment property.
The ONS state that their private rental sector rent data comes from Valuation Office Agency (VOA), Scottish Government (SG) and Welsh Government (WG). All three organisations deploy rental officers to check the rental prices being paid for properties in the UK private rented sector (PRS).
DCLG produces estimates of the private rental dwelling stock for every region in England, whilst the Scottish Government and Welsh Government produce estimates of private rental dwelling stock for Scotland and Wales.
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