ONS - Index of Private Housing Rental Prices, UK: February 2023

Over the last 12 months there has been a lot of discussion surrounding rent increases on the private rented sector. Many landlords took the decision not to increase rent during the Pandemic or post Pandemic, however, due to the cost living crisis, the cost of energy and increases in interest rates, landlords took the decision to increase rents.

Landlords are permitted to increase rent at the end of every 12-month term. This can be done by relying on the rent review clause found in the tenancy agreement. If the tenancy is periodic and the tenancy is silent on rent increases, the landlord must serve a Section 13(2) notice (Form 4).

Importantly, a discussion with the tenant before increasing rent would be sensible as this allows both landlrod and tenant to negotiate on an increase which suits both parties.

The Office of National Statistics have published their experimental price index which tracked the rents paid to landlords in the UK.  The report published on the 22nd March 2023 provides the following information and statistics :-

• Private rental prices paid by tenants in the UK rose by 4.7% in the 12 months to February 2023, up from 4.4% in the 12 months to January 2023.

• Annual private rental prices increased by 4.5% in England, 4.2% in Wales and 4.9% in Scotland in the 12 months to February 2023.

• Within England, the East Midlands saw the highest annual percentage change in private rental prices in the 12 months to February 2023 (4.9%), while the West Midlands saw the lowest (4.0%).

• London's annual percentage change in private rental prices was 4.6% in the 12 months to February 2023.

Private rental prices paid by tenants in the UK increased by 4.7% in the 12 months to February 2023, representing the largest annual percentage change since this UK series began in January 2016.

The annual percentage change in UK private rental prices paid by tenants remained steady between November 2019 and the end of 2020. The annual percentage change in rents slowed in early 2021, which was driven by the slowdown, and later reduction, of London rental prices. This may have reflected lower demand in London because of the coronavirus (COVID-19) pandemic. For example, remote working meant that workers no longer needed to live close to offices, and housing preferences changed.

Private rental prices in the UK began to increase in the second half of 2021, with annual growth across all regions except London, where prices decreased. The annual percentage change in rents increased across all regions in 2022, including in London, and this has continued in early 2023.

In the 12 months to February 2023, rental prices for the UK (excluding London) increased by 4.8%, up from an increase of 4.4% in the 12 months to January 2023. Private rental prices in London increased by 4.6% in the 12 months to February 2023, up from an increase of 4.3% in the 12 months to January 2023. This is the strongest annual percentage change in London since January 2013.

Annual UK private rental price percentage change by country

In England, private rental prices increased by 4.5% in the 12 months to February 2023. When London is excluded from England, private rental prices increased by 4.4% in the 12 months to February 2023. Both of these figures reflect the highest annual percentage change since the England series began in January 2006.

Private rental prices in Wales increased by 4.2% in the 12 months to February 2023. This is up from an increase of 3.9% in January 2023, and is the highest annual percentage change since the Wales series began in January 2010.

Private rental prices in Scotland increased by 4.9% in the 12 months to February 2023. This is up from an increase of 4.5% in January 2023, and is the highest annual percentage change since the Scotland series began in January 2012.

The annual percentage change for Northern Ireland in February 2023 was 9.5%. This was higher than the other countries of the UK. Northern Ireland data have been carried forward since December 2022.

Annual UK private rental price percentage change by English region

The largest annual rental price percentage change in the 12 months to February 2023 in the English regions was in the East Midlands, at 4.9%. The East Midlands was also the region where private rental prices were rising at the fastest annual rate throughout 2022 and the beginning of 2023. Of the English regions, the lowest annual rental price percentage change in the 12 months to February 2023 was in the West Midlands, at 4.0%. However, this is still the highest annual percentage change since the West Midlands series began in January 2006.

Read the report in detail on the Office of National Statistics website.