Keep knowledgeable with free updates
Merely signal as much as the Value of residing disaster myFT Digest — delivered on to your inbox.
UK tenants have been hit by the very best inflation price of any family group, overtaking these with mortgages, in line with official statistics that replicate the affect of rising rents.
Family price inflation for personal renter households rose by 3 per cent within the yr to September, which was increased than the two.6 per cent for these with mortgages for the primary time since comparable knowledge started in 2022, the Workplace for Nationwide Statistics mentioned on Thursday.
The inflation price for renters was the very best of any group and in contrast with a price of 1 per cent for individuals who personal their dwelling outright, 1.1 per cent for retired folks and a pair of per cent for all households.
The ONS attributed the newest development to rising hire funds. Separate knowledge published last week confirmed that common non-public rents elevated by 8.7 per cent within the 12 months to October, up from 8.4 per cent within the 12 months to September and the quickest tempo since April.
Sarah Cumbers, chief govt of the Royal Statistical Society, mentioned the figures confirmed that inflation was “not having the identical affect on everybody, with non-public renters seeing the very best price of inflation however these with mortgages intently following”.
She added that these completely different experiences are one thing that the headline price of inflation didn’t seize, and urged policymakers to “check with the family prices indices to raised perceive how rising prices are impacting completely different teams, and notably probably the most susceptible”.
The family price inflation figures examine with the 1.7 per cent rate of consumer price inflation for September.
The info was a part of the primary quarterly publication of the ONS family price index, which relies on how a lot various kinds of households spend on items and providers.
The headline inflation price, in contrast, displays a mean of products and providers consumed by all UK households. Providers costs, which have risen this yr, have a larger affect on richer households as a result of they spend a much bigger share of their revenue on non-essentials. In distinction, power costs, which have fallen this yr, have an effect on poorest households probably the most.
Information printed on Thursday confirmed that richer households skilled annual inflation of two.5 per cent, in contrast with 1.4 per cent for poorer households.
In October, new tenants on common spent about 30 per cent of their revenue on hire, the very best since data started in 2017, in line with property data firm PriceHubble printed additionally on Thursday by the ONS.
Over the previous three years, extra folks have needed to hire following quick rises in home costs since 2020 and the surge in mortgage prices in 2023. On the identical time, landlord’s listings of properties to hire have been contracting, reflecting increased prices, in line with the Royal Establishment of Chartered Surveyors.
In distinction with rents, mortgage charges have been declining since their peak in the summertime of 2023, because the Financial institution of England has minimize its base charges.
