Rent increases by 2.4% in the past year, says ONS

Private rents across the UK increased by 2.4% in the past year and outpaced the growth in real wages, according to data from the Office for National Statistics (ONS).

Rents grew by 2.4% in the 12 months to July, so a property that cost £500 a month in July 2015, increased on average to £512 in July 2016. Rental prices in the whole of the UK, excluding London, grew by 2.1% in the same period.

Since January 2011, rent has increased in England more than in Wales and Scotland. In the year to July 2016, rent grew 2.6% in England, in Scotland rent gradually slowed to 0.2% from a 2.1% high in the previous year and in Wales it remained unchanged.

The ONS said employment was at a record high as unemployment was at 4.9%, the lowest rate since the economic slowdown in 2008.

In the three months to June regular pay grew by 2.3%, compared with the same period last year, which the statistics office said continued a revival of real earnings growth, but rent had been growing slightly faster than real wages in recent months.

Since the beginning of 2012, rent in England had annually increased between 1.4% and 3% year-on-year.

During the period, private rents increased in all English regions The largest increase was in the south east with 3.5%, followed by the east of England with 3.1% and London with 3%. The ONS said that the annual rental growth in the south east has surpassed London since May.

The areas with the lowest annual rent increases were the north east with 0.9%, the north west with 1.2%, and Yorkshire and Humber with 1.3%.

In comparison to the ONS’ UK house price index, over a longer period house prices had generally been stronger than rent growth for a number of years. The ONS said the average 12 month house price inflation between January 2013 and June was 5% compared with rent with 2.1%.

The high price of rent is due to high demand and low supply of rental property, as in the three months to July, demand increased according to the Royal Institute of Chartered Surveyors (RICS). In RICS’ residential market survey it found that new landlord instructions were unchanged in July.

The Association of Residential Letting Agents also said that demand from tenants increased in June and that supply of rental properties rose in June, after a sharp drop in May.