ONS reports a rental price surge across UK

Private rents increased by more than 6% in England, according to the ONS lettings price index.

London saw a big surge in rent prices at 6.8% ­­­– the biggest annual rate rise since London records started in 2006.

Private rental prices in Wales increased by 6.9% in the 12 months to October 2023 and by 6.8% in Scotland.

Rise in rental prices

ONS head of housing, Aimee North, said: “The rise in rental prices continues to accelerate across the country, with Wales, London and Scotland seeing the biggest annual increases.”

Gareth Atkins, managing director of Lettings at Foxtons, said: “In October, London saw its typical decrease in renter registrations, which we’ve all come to expect after the summer rush ends and we head into the calmer winter season.”

Mr Atkins said while supply and demand in London were still imbalanced rental instructions increased.

He said: “At the same time, we are encouraged that the 12% increase in rental instructions suggests landlords remain confident in London’s unfailing appeal.”

Pushing prices into negative territory

The ONS house price index reveals UK house prices fell -0.1% in the 12 months to September 2023 the first annual decline since April 2012.

The average UK house price was £291,000 in September 2023, which was little changed from 12 months.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The long-awaited drop in house prices has finally materialised.

“The market has proved incredibly resilient in the face of overwhelming headwinds, but mortgage rate hikes over the summer dealt the final blow, pushing prices into negative territory.”

Reduction in buyer activity

Residential director at Woods Hardwick, Tom Francis, said: “The property market has stood fairly static over the last year and a reduction in buyer activity caused by higher mortgage rates has resulted in house prices cooling.

“However, new-build property values have continued to put in a strong performance and this should help reassure the nation’s housebuilders in what have become uncertain economic times.”

Key is stability

Director of Benham and Reeves, Marc von Grundherr, said: “The nights may have drawn in but the future of the property market is currently looking far brighter than many would have anticipated at the start of the year.

“Yes, sold prices are yet to show any significant movement in either direction and the cost of borrowing remains higher than the record lows home buyers had become accustomed to.

“However, the key is stability, and with interest rates frozen and inflation falling, 2024 should bring a far more settled time for buyers and sellers alike.”

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