Private rents falling in real terms
New figures showing rents have dropped, when set against inflation, prove the market is working, says the RLA.
Private rental prices paid by tenants in the UK rose by 1.3% in the 12 months to July 2019, unchanged since May 2019.
Inflation over the same period was:
· 2% as measured by CPI(H) which includes owner occupiers’ housing costs.
· 2.1% as measured by CPI.
· 2.8% as measured by RPI.
This means a real term fall in private rents.
The figures were taken from the Office for National Statistics – which published its latest Index of Private Housing Rental Prices for July 2019 today.
David Smith, policy director for the RLA said: “Today’s figures show that the market is working.
“It demonstrates clearly that introducing rent controls linked to inflation, as called for by some, would leave tenants worse off as rents would rise faster than they currently are.
“Welcome though today’s news is, rising demand for and falling supply of homes for private rent risks considerable increases in rents which will only hurt tenants.
“It is vital the government stops blaming landlords for the housing crisis and introduces positive, pro-growth measures, to support the majority of landlords who do a good job in providing the homes to rent the country desperately needs.
“All the talk of longer tenancies will mean nothing if the homes to rent are not there in the first place.”
According to the data published by the Office for National Statistics, private rental prices paid by tenants in the UK rose by 1.3 per cent in the 12 months to July 2019, unchanged since May 2019.
In London they rose by 0.9 per cent in the 12 months to July 2019, unchanged since May 2019.
Over the same period, inflation was 2.1 per cent as measured by CPI and 2.8 per cent as measured by RPI.
According to the latest figures from the Royal Institution of Chartered Surveyors (RICS), a fall in the supply of private rented housing whilst demand from prospective tenants increases is “likely to squeeze rents higher”.
Tenant demand has picked up despite the government’s efforts to boost homeownership and RICS notes that many respondents to its latest residential market survey saw a rise in the number of enquiries from new home buyers in July.
Written by Sally Walmsley