Private rents falling in real terms says new data

RENTS paid by private tenants across the UK are falling in real terms according to official data published today.

The figures from the Office for National Statistics show that private rents rose by 1.2% in the 12 months to June of this year.

This increase remains well below all measurements of inflation with the smallest increase, CPI including housing costs, being 2.4 per cent.

Private rents grew by 1.1 per cent in England. 1.5 per cent in Wales and 1.2 per cent in Scotland.

Regionally, whilst the East and West Midlands saw the highest annual growth in private rents at 2.4 per cent, London saw the lowest, with rents falling in actual terms by 0.1 per cent or 2.5 per cent in real terms.

The real terms fall in rents comes despite concerns about the demand for rental housing outstripping supply. Recent data from the Royal Institution of Chartered Surveyors has pointed to rents increasing by 3 per cent over the next year as a result of the demand for homes to rent exceeding supply.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Today’s figures burst the myth that landlords are hiking rents by as much as possible and demonstrate that market forces are the biggest influence on rent levels. It is clear also that the trend of renters moving out of the capital in response to the pandemic continues.

“That said, demand for privately rent homes continues to outstrip supply and without further efforts to meet that demand, rents will continue to rise. The Government needs a strategy that properly recognises the importance of a thriving private rented sector in which tenants have genuine choices over where they rent.”

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Notes:

• Further information about the NRLA can be found at www.nrla.org.uk.  It tweets @NRLAssociation.
• For further information contact Ed Jacobs by emailing [email protected] or ring 07706386773.
• The NRLA’s press office can be contacted by emailing [email protected] or ring 0300 131 6363.
• Data of the Office for National Statistics’ latest Index of Private Housing Rental Prices can be accessed at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/june2021.
• The latest inflation data can be accessed at: https://www.ons.gov.uk/economy/inflationandpriceindices.
• The most recent Residential Market Survey for June 2021 from RICS can be accessed at: https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/6._web_-june_2021_rics_uk_residential_market_survey_tp.pdf. It notes that: “In the lettings market, tenant demand growth seemingly accelerated over the month, with a net balance of +60% of contributors noting a rise (up from a reading of +48% in May). At the same time, the shortfall in new landlord instructions intensified further, as a net balance of -32% of respondents saw a decline (a deterioration on -21% beforehand). As a result, survey participants continue to envisage widespread rental growth going forward, with headline projections standing at +3% for the coming twelve months. In London, twelve-month rental growth projections have now been in modestly positive territory in each of the last three reports, signalling a turnaround relative to the negative assessment for rents being returned earlier in the year.”