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)

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

IPHRP and other price indices

Note that the IPHRP is shortly to be replaced as the ONS measure of private sector rents. Although its replacement will continue to take account of both new and existing tenancies. The replacement, the Price Index of Private Rents (PIPR), is outlined in more detail in this ONS discussion

The chart above focuses on price changes in the economy since 2019. It shows three different measures of price change: The IPHRP index – described by the ONS as “experimental” - is compared in this chart to two price indices (the CPI and CPI-H), which are better known, with each collecting price data from across the wider economy.

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.

The rental price index continues to grow on this month-by-month measure. This is in contrast to the wider price indices where both of the index figures fell in January compared to December.

The reason the IPHRP is rising whilst the other is falling in part reflects the lag which results from annual tenancy renewal and new tenancies. Also, often overlooked as a factor in rental price inflation is the impact of Buy-to-Let fixed term mortgages coming to an end. When they do, the revised terms are having an impact into higher rentals. 

The annual growth of rental prices now (January data) stands at 6.2%pa. The annual rate has remained unchanged since November 2023, and so is the joint-highest annual percentage change since this UK data series began in January 2016.

In terms of the wider price indices, the CPI now stands at 4.0%pa, and the CPIH at 4.2%pa.  The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services (principally higher gas and electricity charges). The largest downward contribution came from furniture and household goods, and food and non-alcoholic beverages.

The annual rate of food and non-alcoholic beverages has fallen from 8.0% in December 2023 to 7.0% in January 2024, which is the lowest annual rate since April 2022.

Monthly prices for food and non-alcoholic beverage fell by 0.4% between December 2023 and January 2024. This was the first fall in monthly prices since September 2021, and the largest fall since July 2021.

 

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

This link has more information - at a regional level - for rental prices.

 

The Index of Private Housing Rental Prices (IPHRP) is an index which tracks the prices paid for renting property from private landlords in the UK. It includes new tenancies as well as longer-term rental agreements. For more information on the IPHRP and how the ONS are planning to make further improvements to measuring rental prices, see this article here

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 how the affordability problems experienced by tenants is a product of stagnating real wage growth.

The December data on real wages (Total pay, seasonally adjusted) shows they have fallen have fallen 1.9% since June. Over the last year real wages have grown by 1.5% after taking account of inflation. Whilst Chart 3 seems to show rents increasing rapidly, a glance at Chart 2 shows the difference between rents and wider price changes (inflation). 

In December 2023 real average weekly pay (including bonuses) was £512pw (in 2015 prices). In December 2019 (pre-Covid) they were £498pw on the same measure.  Real wages remain broadly flat, and this is a major factor in housing affordability.

 

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