Private rental prices paid by tenants in England increased by 1.4 per cent annually, according to the latest Index of Private Housing Rental Prices (IPHRP), released by the Office for National Statistics (ONS). This demonstrates the resilience of the private rental market, which has withstood the impact of Brexit on the residential property market in England.
The growth in private rental prices is up slightly from 1.3 per cent in the year to September 2019. When London is excluded from England, privately rented properties increased by 1.6 per cent in the 12 months to October 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 started to pick pace since the end of 2018, driven by strengthening growth in London. London private rental prices increased by 0.9 per cent in the 12 months to October 2019. The private rental prices in London have been consistently growing for the last four months.
Focusing on the English regions, the largest annual rental price increase was in the South West (2.2 per cent), followed by the East Midlands (1.9 per cent), Yorkshire and the Humber (1.8 per cent) and the South East (1.7 per cent). On the whole, rental prices in the UK increased by 1.3 per cent annually.
Focusing on the long-term trend, between January 2015 and October 2019, private rental prices in the UK increased by 8.1 per cent. This clearly indicates that the fundamentals of the UK residential property market are strong and continue to provide healthy returns to investors.
The Royal Institution of Chartered Surveyors (RICS) reported in their October 2018 Residential Market Survey that tenant demand has staged a sustained recovery in London, increasingly outstripping supply.