PRS Statistics Bulletin – September 2017
Welcome to the September PRS Statistics Bulletin from the RLA Private renting Evidence, Analysis and Research Lab (PEARL). We have rounded up all of the latest housing statistics and data updates from across the private rented sector and compiled them into one easy to digest bulletin. This month we have a smaller update with the the latest monthly figures regarding house prices, private rents, and buy-to-let mortgage activity.
PRS Evidence Dashboard Update
In September there were updates to the following data-sets and indices:
- Index of Private Housing Rental Prices (IPHRP)
- House Price Index
- Average Weekly Earnings
- Mortgage Activity (Value & Number of Buy-to-let mortgages)
You can find the updated statistics displayed on our PRS Evidence Dashboard here.
Index of Private Housing Rental Prices (IPHRP)
The latest Index of Private Housing Rental Prices (IPHRP) shows that private rents increased in Great Britain by 1.6% in the 12 months to August 2017. This figure is down on the previous month of 1.8%, which had remained unchanged for the past 4 consecutive months. Across Great Britain there were varying rental price changes in the 12-month rate to August 2017:
- England rental prices grew by 1.7%
- Wales rental prices grew by 1.3%
- Scotland rental prices grew by 0.3%
- London rental prices grew by 1.2%
Great Britain and the countries within have all experienced rental price growth since 2011, however, rental prices have grown more in England than in Scotland and Wales. In Scotland, rental price growth has weakened since June 2015 and has remained near to 0% growth since August 2016. While Wales has experienced stronger rental price growth since November 2016, rental price growth in Wales remains unchanged at 1.3% for the second consecutive month.
The latest data is indicating a slowdown of rental prices across Great Britain since 2015, and this slowdown is being driven by the London market. With prices in London is 0.4 percentage points below that of Great Britain. Rental price growth in London has continued to slow and is now 0.3 percetnage points down from the previous month.
Consumer Prices Index (CPI)
The Consumer Prices Index 12-month rate remains unchanged for August 2017 at 2.9%. In comparison to the IPHRP for Great Britain, inflation increased by 1.2 percentage points more than private rents for the year until August 2017.
House Price Index
In the year to July 2017, average house prices in the UK increased by 5.1%. UK house price growth has slowed since June 2016 (from 8.2%) and has now stabilized at around 5% for 2017 so far. Growth in UK house prices was contributed mostly from growth in England. Across the UK, house price change for the year to July 2017 was the following:
- England house prices grew by 5.4%, with the average house price now at £243,000
- Wales house prices grew by 3.1%, with the average house price now at £151,000
- Scotland house prices grew by 4.8%, with the average house prices now at £149000
- Northern Ireland prices grew by 4.4%, with the average house prices now at £129,000
Average Weekly Earnings
In the year to July 2017, Average Weekly Earnings (AWE) Regular Pay increased by 2%, with average weekly earnings remaining at £474.
Buy-to-Let Mortgage Activity
Buy-to-let lending activity in July 2017 remained relatively consistent in comparison to previous months, with an increase to 6,200. This figure has remained relatively unchanged since October 2016. The number of buy-to-let mortgages for new house purchases has not recovered from the Stamp Duty changes, and are well below the number for May 2013 (at 6,900). Remortgaging is currently driving buy-to-let lending activity, with 13,100 remortgages in July 2017. This has remained relatively consistent since June 2015, apart from a spike in Q1 2016.
The buy-to-let lending activity is demonstrating significant trends and indicates that the stamp duty changes have hampered the previous strong growth in the private rented sector. This could limit the future supply of private rented properties, reducing supply for tenants and could potentially lead to increased competition in the market.
Updates from across the sector
Royal Institution of Chartered Surveyors
The latest RICS UK Residential Market Survey for August 2017 indicates that there is a ‘increasingly divergent picture’ in the UK Housing Market. RICS report that there was little change in buyer enquiries, and agreed sales were flat for another consecutive month. Furthermore, new sales intructions improved slightly to -1% incomparison to -11% for the previous month. In regards to the PRS, the figures from
In regards to the PRS, the figures from RICS provide a worrying outlook for the sector. RICS reported that 61% of respondents expect more landlords to exist the sector rather than enter the sector in the next 12 months. At the same time, tenant demand has grown and landlord instructions has remained flat. Due to this imbalance to supply/demand in the PRS, RICS predict there will be further increases to rental prices over the next 12 months.