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
Although revised data may revise this analysis over the course of the next few weeks, the UK economy moved into recession with Quarter 4 (-0.3% growth compared to the previous quarter) following Quarter 3 (-0.1%) with negative growth. The previous quarter also recorded zero (0.0%) growth, emphasising the difficulties the economy is having at present.
Over the year as a whole, real GDP fell by 0.2%, the first time negative annual growth across four quarters had been recorded since 2021 Quarter1 when the economy was affected by Covid. However the ONS report the economy is 0.1% larger at the end of 2023 than it was at the beginning.
Note that the graph shows first estimate data which will differ as the ONS revise their own figures.
Construction output has been particularly badly affected over the last quarter with a 1.3% reduction in Output over the quarter.
Note that GDP is always subject to some revision. This is especially true post-Covid. The NRLA track the "first estimate" series. Resources mean revisions cannot always be inserted into these pages, except when new quarterly data is announced. Researchers are advised to check the relevant ONS data for the most recent figures.
(Note that GDP is always subject to some revision. This is especially true post-Covid. The NRLA track the "first estimate" series. Resources mean revisions cannot always be inserted into these pages, except when new quarterly data is announced. Researchers are advised to check the relevant ONS data for the most recent figures.)
Changes in price indices
Chart 2: Private rental price changes compared to other price indices
Last month 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 publishes analysis of both datasets alongside each other.
The IPHRP is no longer calculated.
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 data and publishes analysis of both datasets alongside each other.
The chart above focuses on price changes in the economy since 2019. It shows the PIPR index – described by the ONS as “official statistics in development…subject to revisions if improvements in the methodology are identified” – 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 from the ONS. The more widely reported annual indices provide a snapshot of the latest available price information, compared to those collected twelve months ago.
This chart shows why, even though the annual rates of inflation are falling, interest rates show no signs of being reduced: Whist price growth has slowed down compared to last year, on a month-by-month basis price rises are still significant enough for the Bank of England to be cautious.
On an annual basis, the PIPR is growing at a much faster rate than prices: In March, the PIPR was running at 9.2%pa – well ahead of the CPI (3.2%pa) and the CPIH (3.8%pa).
The chart shows however that in the long run, rents are rising in line with inflation.
Note that within the wider inflation measures, food inflation (4%pa in March) is now at its lowest since November 2021. The ONS report that Prices rose by 0.2% between February and March 2024, compared with a monthly rise of 1.1% a year ago.
Prices have been relatively high but stable since early summer 2023, rising by less than 2% between May 2023 and March 2024. This compares with a sharp rise of around 22% seen between March 2022 and May 2023.
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
Chart 3 shows wage growth continuing to stay flat once inflation is taken into account.
Year-on-year real wages (Average Weekly Earnings) grew in February. When compared to the same month in 2023, real wages in February 2024 grew by 1.8% - the highest annual growth since September.
Yet because real earnings took such a hit between April 2022 and April 2023, peoples’ pay packets are only just recovering. Real average wages (total pay) in February are at the same level now as they were in September 2022 - £515pw (2015 prices).
More information on wages in Great Britain can be found in this ONS analysis.