Index Of Private Housing Rental Prices, UK - January 2024
15th February 2024
Private rental prices paid by tenants in the UK rose by 6.2% in the 12 months to January 2024, unchanged for the second consecutive month.
Annual private rental prices increased by 6.1% in England, 7.0% in Wales and 6.8% in Scotland in the 12 months to January 2024.
Within England, London had the highest annual percentage change in private rental prices in the 12 months to January 2024, at 6.9%, while the North East saw the lowest, at 4.7%.
The annual inflation rate of private rental prices in the UK began to increase in the second half of 2021 (Figure 1). Annual growth was seen across all regions except London, where prices decreased. The annual percentage change in rents increased across all regions in 2022, including in London, and this generally continued during 2023.
In the 12 months to January 2024, rental prices for the UK (excluding London) increased by 5.9% (provisional estimate) the same annual percentage change as the previous two months. Private rental prices in London account for almost a third of UK rental expenditure, as shown in our Index of Private Housing Rental Prices, UK: annual weights analysis dataset.
Private rental prices in London increased by 6.9% in the 12 months to January 2024. This was up from 6.8% in the 12 months to December 2023, and represents the joint-highest annual percentage change since this London data series began in January 2006.
The Royal Institution of Chartered Surveyors (RICS) reported an increase in tenant demand, in their January 2024 UK Residential Market Survey, in the three months to January. However, respondents once again noted a decline in the volume of new landlord instructions. RICS also noted that the imbalance between supply and demand is still expected to drive rental prices higher over the coming months.
Supply and demand pressures can take time to be reflected in the Index of Private Housing Rental Prices (IPHRP). This is because the index reflects price changes for all private rental properties, rather than only newly advertised rental properties.
UK private rental prices
Private rental prices paid by tenants in the UK increased by 6.2% in the 12 months to January 2024 (provisional estimate). The annual rate has remained unchanged since November 2023, and represents the joint-highest annual percentage change since this UK data series began in January 2016.
Annual UK private rental price percentage change by country
England
In England, private rental prices increased by 6.1% in the 12 months to January 2024, unchanged from the increase in the 12 months to December 2023. When London is excluded from England, private rental prices increased by 5.7% in the 12 months to January 2024. The figures are the joint-highest annual percentage changes since these data series began in January 2006.
Wales
Private rental prices in Wales increased by 7.0% in the 12 months to January 2024. This was the largest annual increase of all the countries in Great Britain, but showed a further slowing from the record high of 7.3% in the 12 months to November 2023.
Because the Index of Private Housing Rental Prices (IPHRP) measures rental price changes of the entire privately rented stock, changes in annual inflation of newly let rental prices take time to be reflected in IPHRP's measure. HomeLet's annual inflation for new tenancies in Wales rose substantially between mid-2022 and early 2023, reaching a peak of 11.0% in the 12 months to March 2023. The rise in the IPHRP's annual inflation for Wales between mid-2022 and late 2023 is likely to reflect this high annual inflation for new lets.
However, IPHRP's annual inflation of the stock in Wales has slowed slightly in the latest two consecutive months, down from the record-high annual rate of 7.3% in the 12 months to November 2023. This is consistent with HomeLet's report that annual inflation for new lets in Wales has generally slowed in 2023, slowing to 6.5% in the 12 months to January 2024.
Our Measuring the UK housing market blog post provides more detail on the differences between stock and flow measures of rental prices.
Scotland
Private rental prices in Scotland increased by 6.8% in the 12 months to January 2024, up from 6.3% in the 12 months to December 2023. This is the highest annual rate since the Scotland data series began in January 2012. The Cost of Living (Tenant Protection) Scotland Act has capped in-tenancy rental price increases in Scotland since late 2022 (see Section 7: Measuring the data).
HomeLet's annual inflation for new tenancies in Scotland has risen substantially in recent years, from 3.7% in the 12 months to May 2021, to a peak of 15.8% in the 12 months to July 2023. HomeLet reports that new let annual inflation in Scotland has slowed in recent months, slowing to 8.0% in the 12 months to January 2024.
It takes time for changes in new let annual inflation to be shown in IPHRP's stock measure. So, the continued rise in the IPHRP's annual inflation for Scotland since this Act was passed is likely to reflect the high annual inflation for new lets (that are not subject to the price cap) in 2022 and 2023.
Scotland rents data (underlying the IPHRP's stock measure) are mainly for advertised new lets, which are not subject to the price cap. We advise users to bear this in mind when interpreting estimates for Scotland and comparing with other UK countries.
Northern Ireland
Private rental prices in Northern Ireland increased by 9.5% in the 12 months to November 2023, up from 9.3% in the 12 months to October 2023. The annual rate for Northern Ireland remains higher than for other UK countries. Northern Ireland data lag two months behind the rest of the UK and updated Northern Ireland data will be used to update our UK estimates when they become available.
Read the full ONS report HERE
