Private rental costs rise across Britain – while house price growth declines | Business News

Private rental bills stood at a new record high for a 17th consecutive month in August, according to official figures charting continued growth across Britain.

The Office for National Statistics (ONS) measured rental prices rising at a rate of 5.5% in the 12 months to August.

That was up from the 5.3% in the year to July.

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Wales saw the strongest leap over the annual period – running at 6.5%.

Scotland’s was running at 6%, while average prices paid by tenants stood at 5.4% in England, the ONS said.

It added London’s rate stood at 5.9% – not seen since its data series for the capital began in 2006.

Wider house price data, which lags the rental figures, showed a continued decline in the annual rate of growth to just 0.6% UK-wide over the 12 months to July.

The ONS report chimes with more up to date information from the likes of Nationwide and Halifax which have since measured UK prices going into reverse, partly a result of the traditional summer slowdown in activity.

Both the house price and rental data reflect the impact of rising borrowing costs.

ONS head of housing market indices, Aimee North said: “Annual house price inflation, measured using final transaction prices, slowed in July, with negative annual inflation in the South West and London.

“Annual inflation for UK rental prices continues to rise, setting a record high for the seventeenth month in a row.

“Wales is seeing the largest annual price growth nationally, while London rents continue their record-breaking surge.”

Rising private rents are reflecting the additional costs faced by landlords as the Bank of England’s action against inflation pushes up mortgages.

However, they are also a consequence of high demand for every property given a shortage of homes.

Agents have been reporting fierce competition, helping to drive up yields for owners as they become squeezed by falling house prices and higher costs more broadly.

The gap between supply failing to meet demand could help support rental costs in the coming months though there are signs that the worst of the pressures facing the housing market is nearing its end.

The latest inflation data came in weaker than expected, bolstering expectations that pressure on the Bank of England to continue interest rate hikes is now over.

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