Rent prices in South East overtake London, says ONS

Rental prices in South East England grew 3.5% in the year to September 2016, surpassing that of London which rose 2.7%, according to the Office of National Statistics (ONS).

The ONS’ index of private housing rental prices (IPHRP) showed that all regions in England faced a hike in rent prices last month.

The largest annual rental price increases were in the South East, up from 3.4% in August 2016, followed by the East of England, which grew 3.0%, down from 3.3%. London's growth in September compared to 2.6% the prior month.

London’s rental inflation comes after seven successive periods of falling or stable inflation.

In contrast, rental inflation in the South West has increased for four consecutive months, rising from 1.5% in May to 2.2% in September.

Annual rental growth in the South East and East of England has surpassed that of London since May and June 2016.

The lowest annual rental price increases were in the North East at 1%, up from 0.9% in August 2016, the North West at 1.3%, up from 1.1%, and Yorkshire and The Humber at 1.5%, up from 1.3%.

For Britain as a whole, rent prices rose 2.3% year-on-year in September, the same rate of growth as the previous month.

Excluding London, prices rose 2.1% in Britain.

Rental prices in England grew 2.5% but rose just 0.1% in Wales and fell 0.1% in Scotland.

England has seen annual increases in rent between 1.4% and 3.0% year-on-year since the beginning of 2012.

“Continued inflation in the rental market is likely to have been caused by demand in the market outpacing supply,” the ONS said.

The ONS cited reports by the Royal Institute of Chartered Surveyors (RICS) and the Association of Residential Letting Agents (ARLA) that show strong growth in non-seasonally adjusted tenant demand in September and a rise in prospective tenants. Both RICS and ARLA reported only marginal movements in the number of properties available to tenants.