Rent Index for the private rental sector is long overdue. At the moment landlords and investors have to rely on dubious figures related by mortgage and property companies as press releases and done purely to market their businesses rather than giving any meaningful contribution to rental yields in the private rental sector.
I've been calling for government to step in and provide decent quality rental yield data for some time. I was encouraged to see that at long last a report by the Office for National Statistics (ONS) has recommended an official private rental price index. An index of private rental prices would cover a “key gap in the coverage
of official housing market statistics”, said the National
Statistician’s Review of Official Housing Market Statistics. This would
helping the government to come up with a truer measure for the consumer
price index, and helping local authorities to set social rent prices.
It would also make it easier for financial institutions to assess
returns on housing investments.
My view is that the ONS currently serves up all sorts of obscure information about the state, health and attitudes of our great nation. For instance they will be able to tell you about the average number of nights spend abroad by UK holiday makers. Personally, I think that a proper understanding of the relationship between the capital values of residential property and it's income generating potential (the rent) would be a far more useful and interesting statistic for investing institutions, policy makers and landlords to have at their finger tips.
Nick Jopling, executive property director at Grainger, said the ONS
report was “positive recognition of the growing significance of renting
in the UK”. “We’ve spent a lot of time considering how a private
rental index could work and what benefits it could bring to the sector,
to both investors and tenants. We hope to have the opportunity to work
with the Office of National Statistics to develop this idea further.”
"HERE HERE Nick!" But landlords don't hold your breath....this could take some time.
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