UK rents up in June?

The BBC has reported that rental prices are static in June and the reason given for this is an increase in house buying activity.

The source of this data is LSP Property Services Plc, who have managed to generate some PR if nothing else. They are the parent company of two estate agent chains; Your Move and Reeds Rains.

The basis of these figures seem to be simply the average of 18,000 properties that they look after and are not adjusted for changes in the mix of properties. This is actually a small number of properties compared to 3.8m privately rented properties(about 1 in 200)

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Area	Rent	Monthly Change %	Annual Change %
London	£1,143	0.1	6.4
East	£743	0.1	-0.1
South West	£636	0.5	0.7
Yorkshire	£533	-0.6	-0.4
North West	£572	0.5	-1.1
Wales	£551	-1.9	1.2
South East	£741	-0.4	1.4
North East	£531	-0.1	2.5
West Midlands	£565	-0.5	0.7
East Midlands	£558	-0.7	3.4
England and Wales	£737	0	2.6

Source :LSL Property Services Plc

Looking at the table it is slightly surprising that this was reported as news at all. All statistics are subject to errors, especially when they are based on a small sample of a large population. Until there are a few more months where prices are static it seems that we cannot be sure that rental prices are really falling. This may be a problem with the sample or a simple one month blip. Indeed prices were reported as rising  in May, April and March. So there is a hardly much of a trend going on.



Data on rental prices is harder to obtain than for house purchases. There is no equivalent of the Land Registry, where prices of sales have to be logged. Nor are there large private indexes like Halifax or Nationwide as the rental market seems to be more fragmented than the mortgage market. Landlords do not have to disclose rents they are receiving. However rental properties are important for house prices, especially over the long term as people have to either pay rent or mortgages. Higher rental prices should encourage people to buy. They should also encourage investors to purchase property in order to let it out.

I previously posted how difficult it is to forecast house prices moves. It seems that it is difficult to ascertain even actual rent prices.