UK private rental prices went up by 2.3% in the 12 months to February, representing the largest annual growth rate since December 2016.
The Index of Private Housing Rental Prices reveals that the East Midlands saw the highest growth (3.8%), while London saw the lowest (0.2%), which reflects a fall in demand caused by remote working shifting housing preferences, according to the Office of National Statistics (ONS). It also reflects an increase in supply as short-term lets have changed to long-term lets.
In England, prices grew by 2.1%, representing the highest 12-month growth rate since March 2017. When London is excluded, private rental prices increased by 3.1%, up from a rise of 3% in January, and the highest 12-month growth rate since the research began in 2006. Wales saw a 1.4% increase, in Scotland it was 2.6% and there was a 6.5% jump in Northern Ireland.
The ONS says growth in private rental prices paid by tenants in the UK had remained broadly flat between November 2019 and the end of 2020, while the start of 2021 saw a slowdown in rental price growth, which was driven by the market in London. Growth in private rental prices has increased since the latter part of 2021, with widespread annual growth across all regions, with the exception of the capital.
It adds that rental price increases recently reported by ARLA and supply challenges flagged up by the Royal Institution of Chartered Surveyors would take time to feed through to the index, which reflects price changes for all private rental properties rather than just newly advertised rental properties.