The Data Observatory

The NRLA Data Observatory is a collection of official and other well-established data sources which when combined, provide a narrative of the Private Rented Sector (PRS). The NRLA tracks approximately 45 key data sets which are updated monthly, quarterly and annually. A selection of these data sets appear in these pages.

Our Deep Insight blog provides a regular extension of the analysis which appears here, as well as those datasets which are not published in the Data Observatory section of this website.

The blog pages also features blog posts from other organisations and academics to provide insight on the PRS. Here you can also find more in-depth summaries of our regular reports and surveys.

Growth & the PRS

GDP

Chart 1: Change in GDP-measured quarterly

Real GDP, UK economy (CVM First Estimate)

The UK economy officially moved out of recession in Quarter 1 with UK gross domestic product (GDP) estimated to have increased by 0.6% between January & March, following declines of 0.3% and 0.1% in Quarters 4 & 3 respectively. 

Meanwhile, compared to the same quarter in 2023, GDP grew 0.2%. Note that the graph shows first estimate data which will vary from future estimates as the ONS revise their own figures. 

However, the construction sector is still struggling: Construction output has fallen by 0.9% in Quarter 1 2024 following a decline of 0.9% in the previous quarter. The level of construction output in Quarter 1 2024 was 0.7% lower than the same quarter a year ago.

The fall reflects a decline in private commercial new work, which fell by 5.3%. The ONS cite reports that housing associations have been re-directing budgets towards repairs and upgrades. This being necessary to deal with problems such as damp arising from tenants using less heating because of the higher cost of living.

 

Changes in price indices

Chart 2: Private rental price changes compared to other price indices

The PIPR rental price index c/w other inflation measures

The chart above focuses on price changes in the economy since 2019. It shows the PIPR index - which measures private rental prices - in comparison to two wider price indices (the CPI and CPI-H). Each of these wider measures collects price data from across the whole economy, the latter placing a greater weight on housing costs.

The above chart tracks price movement on a month-by-month basis using index numbers. This shows how prices have moved each month using data collected by the ONS. The more widely reported annual indices provide a snapshot of the latest available price information, compared to prices twelve months ago.

Last month the NRLA suggested rental price growth was starting to top out. This month the PIPR index rose 0.7% on the month (compared to 0.6% growth between March and April) and (not shown) 8.7% on the year until May.

The UK annual growth of PIPR was 0.2 percentage points down on the previous month. Annual rental price growth peaked at 9.2%pa in March 2024.

The chart shows PIPR now moving well ahead of the CPIH. On an annual basis rental prices are now growing faster than inflation: As stated above, PIPR stands at 8.7%pa while the CPI is at 2.0%pa and CPI-H is slightly higher at 2.8%pa. Since January 2023, rental prices have grown 11.7% while the CPI has grown 5.9%. 

These figures overlap the announcement of the General Election (which was announced on May 22nd). 

Footnotes

Earlier this year the Index of Private Housing Rental Prices (IPHRP) was replaced by the ONS as the measure of rental price inflation.

Its replacement, the Price Index of Private Rents (PIPR), has a completely different methodology. It is also possible now to monitor changes in rental values in a specific local authority area. The ONS has also enhanced its house price index data and now publishes analysis of both datasets alongside each other.

The IPHRP is no longer calculated. 

For more detail on UK-inflation see this report by the ONS. 

The Price Index of Private Rents (PIPR) measures private rent inflation based on data from over 500,000 rent prices across the UK. The PIPR is based on achieved rents for both new and existing tenancies.

More information on PIPR and the methodology can be found in this December 2023 article.

The CPI is a measure of consumer price inflation. It is the preferred measure for inflation targeting and uprating state pensions and benefits. CPI is also the international standard for comparing inflation rates between countries.

The CPIH meanwhile gives added weight to the housing costs associated with owning, maintaining, and living in one's own home. CPIH also includes Council Tax. The ONS describe the CPI(H) as “the most comprehensive measure of inflation.”

Wages & the PRS

Chart 3: A comparison between wages & rental prices

Real wages and rental prices

Chart 3 shows a comparison of real wages (allowing for inflation) compared to rental prices.

Year-on-year real wages (Average Weekly Earnings) continue to show an increase on a twelve month basis. In April real wages grew 2.2%pa. This was the same annual growth as in March, a month in which the ONS revised the annual real wage growth upwards from a previous calculation of 1.6%pa. 

This could well be the time to say that the proportion of variation in annual real wage growth which were a result of Covid-19, furlough and the post-Covid reopening of the economy are now all firmly in the rear-view mirror: Twelve months ago – April 2023 – was the final month of a run of twelve in which real wages declined compared to the previous twelve months. Since then, annual real wages have increased. 

Real wages, once indexed, are now the highest they have been since March 2022.
 

More information on wages in Great Britain can be found in this ONS analysis.