The Office for National Statistics (ONS) has just released its latest data on UK private rents and house prices.
It found that average UK private rents increased by 8.7% in the 12 months to October 2024 (provisional estimate); this is up from 8.4% in the 12 months to September 2024.
Average rents increased to £1,348 (8.8%) in England, £766 (7.9%) in Wales, and £976 (6.6%) in Scotland, in the 12 months to October 2024. In Northern Ireland, average rents increased by 9.0% in the 12 months to August 2024.
In England, rents inflation was highest in London (10.4%) and lowest in Yorkshire and the Humber (5.9%), in the 12 months to October 2024.
Average UK house prices increased by 2.9%, to £292,000, in the 12 months to September 2024 (provisional estimate); this annual growth rate is up from 2.7% in the 12 months to August 2024. Average house prices increased in England to £309,000 (2.5%), in Wales to £217,000 (0.4%), and in Scotland to £198,000 (5.7%), in the 12 months to September 2024.
Market reaction
Alex Upton, managing director of specialist mortgages & bridging at Hampshire Trust Bank, says: “Rents have risen substantially over the past year, and the latest Office for National Statistics data confirms it. Demand for rental properties continues to outstrip supply, and we’re likely to see this trend drive rents even higher in the coming months. Propertymark’s figures show there are around 10 prospective tenants for every rental property available through the average letting agent. Unless there’s a meaningful increase in supply - which isn’t on the horizon - this competition will keep pushing rents up.
“The uncertainty around the Budget made some investors pause, waiting to see if any tax changes would impact their plans. Now that the Government’s intentions are clear, and with the Bank of England’s recent base rate cut, investors have the clarity they need to pick up those paused deals. I expect we’ll see a renewed push in buy-to-let activity as landlords look to meet the strong demand in the rental market.”
Ben Nichols, managing director at RAW Capital Partners, comments: “The ONS’s House Price Index lags two months behind, so it is important to acknowledge that (this) data doesn’t reflect some of the short-term uncertainty that the Autumn Budget introduced to the market. Prices may have slowed month on month, but the annual price increase, coupled with higher levels of market activity in recent weeks, demonstrates the continued recovery that the market has been experiencing since the Bank of England began its rate-cutting cycle. Of course, the Bank has cut rates again since the period this data covers, suggesting this positive trend should continue to the end of the year.
“We often see periods where negativity dominates and stalls decision-making, but long-term market trends have shown us that reality tends to reflect positivity. This pattern is likely to play out again as the dust continues to settle post-Budget, especially after the recent rate cut. Indeed, the Bank rate’s direction tends to have a much bigger influence on market movements than events in Westminster, so we are expecting healthier activity levels and stronger growth in the coming months. Rightmove’s recent forecast suggests that prices will rise by 4% in 2026, reinforcing this view.
“Longer-term forecasts, whilst inherently more uncertain, are trending positively. As the market continues to adjust, therefore, speed and flexibility will remain crucial. Brokers must collaborate with agile lenders to help investors and homebuyers seize the opportunities that could emerge. In doing so, borrowers will be able to carry out their investment plans with confidence in a market that is poised for further recovery and long-term growth.”
Ross Turrell, commercial director at CHL Mortgages, adds: “Prices continue to grow annually, underlining the positive momentum that has been quietly building this year. Amidst significant political and economic change over the past 12 months, the resilience of the property market is shining through, and with another base rate cut having been delivered earlier this month, there is reason for greater optimism.
“In the buy-to-let market, the challenges are more pronounced, given the regulatory and tax changes that landlords are grappling with since the Budget. But price growth and rental yields remain the markers that will attract the most interest, so greater activity and demand across the property market will be met positively.
“The onus is on lenders to work closely with brokers to help support growth across the market. Allowing landlords to pursue new opportunities or better manage their existing portfolios is pivotal, and this means supplying brokers and borrowers not just with the right products, but the additional expertise and support they need to navigate an ever-changing market. If lenders can do this, there is good reason to believe the market will continue to experience growth in the months come.”
