Rents in the private rented sector in Britain grew steadily, latest official data shows
Private rented sector rents paid by tenants in Britain rose by 1.1% in the 12 months to January 2018, down from 1.2% in December 2017, the latest official index shows.
In England, private rentals grew by 1.1%, Wales saw growth of 1.4% while Scotland saw rents increase by 0.3%, according to the data published by the Office for National Statistics (ONS).
The index also show that in the private rented sector in London rent grew by 0.2%, some 0.9% below the British 12 month growth rate and the lowest annual growth since October 2010. Excluding London rents were up by 1.6%.
Between January 2011 and January 2018 rents increased by 15.6% and this was strongly driven by the historical growth in private rental prices within London. When London is excluded from these figures, rents increased by 11.9% over the same period.
A breakdown of the figures show that in England rents increased by 1.1% in the 12 months to January 2018, down from 1.3% in December 2017. The annual growth rate for England is the lowest since December 2010.
The annual rate of change for Wales at 1.4% in January 2018 is still higher than the annual rate of change for England Britain as a whole. Wales has shown a broad increase in its annual growth rate since July 2016.
Rental growth in Scotland increased by 0.3% in the 12 months to January 2018, down from 0.4% in December 2017.
In terms of the English regions, the largest annual rental increase was in the East Midlands at 2.6%, unchanged from December 2017, followed by the South West at 2.1%, which was also unchanged.
The lowest annual rental price increase was in the North East where rents were flat, down from 0.1% in December 2017, followed by London at 0.2%, down from 0.4% in December 2017.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said the figures reaffirm how private housing rental prices have been subdued in recent years.
‘In the face of continuing imbalance between supply and demand, investment in the private rented sector (PRS) has up to now kept pace with demand. This is an impressive performance on the part of our nation’s landlords, especially given the quality improvements the PRS has also enjoyed,’ she said.
‘However, as was highlighted in IMLA’s latest white paper on buy to let, there is evidence that recent intervention by the Government and regulators, such as the rise in second home stamp duty and rental income tax changes, is having an impact on landlords and investors, leading them to take a more cautious approach,’ she explained.
‘The impact of these changes may take time to work through but will likely be felt over several more years. The figures show that the buy to let sector is not immune from economic pressures. Policy makers should refrain from imposing further costs on the sector,’ she added.