Following a series of disputes in Parliament over whether private sector rent prices are rising or falling, Full Fact investigates the figures used by both sides to get to the bottom of the differences.

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"The latest report of the English housing survey was published on 9 February. It shows that rents in the private sector have reduced in real terms..."

Grant Shapps, Minister for Housing and Local Government, 12 March 2012

"What we have seen so far, as housing benefit has been reformed and reduced, is that rent levels have come down, so we have stopped ripping off the taxpayer."

David Cameron, Prime Minister's Questions, 11 January 2012

"Both the Housing Minister and the Prime Minister, out of touch with reality, have asserted on the Floor of the House of Commons that rents are falling in the private rented sector. An analysis conducted by the House of Commons Library reveals that in 90% of local authorities in England, in all nine regions, rents are rising or staying the same. Will the Housing Minister now admit to the 1.1 million families struggling to pay their rent that he got it wrong?"

Jack Dromey MP, 12 March 2012

The Housing Minister Grant Shapps yesterday clashed with his opposite number Jack Dromey on the floor of the House of Commons over whether or not private rent costs are rising or falling.

While Mr Shapps claimed private sector rents have reduced in real terms, Labour's Shadow Housing Minister pointed out that levels have risen or stayed the same in nine out of ten English local authorities. The latter also accused the Prime Minister of perpetuating the same inaccuracy.

After several apparently contradictory datasets and analyses were quoted, the general observer would be forgived for being none the wiser. So what has happened to private rent costs in recent years?

Analysis

Responding to Mr Dromey's concerns, Grant Shapps mentioned another source besides the English Housing Survey that apparently supported both him and the Prime Minister. According to the Housing Minister, rent figures from LSL Property Services PLC's buy-to-let index lent weight to the Prime Minister's remarks in parliamentary questions from 30 January:

"I imagine that the Prime Minister was probably referring to recent surveys by LSL Property Services showing two-month falls in rent levels. Those might be partially seasonal, but nevertheless rents have been falling—we will see what happens in future months."

The LSL index in question is based on an analysis of over 18,000 private properties in England and Wales, and are not seasonally-adjusted.

The most recent data for January 2012 shows that the average private rents in England and Wales stood at £712 - up 0.1 per cent on December 2011. However, since the data is not seasonally-adjusted, it is more useful to note that this is up 4.3 per cent on January last year.

The months referred to by the Prime Minister and the Housing Minister are in November and December last year. The average rent in October was £720; in November it was £717 and in December it was £711. This is the 'fall' referred to by Mr Cameron and Mr Shapps.

Mr Shapps acknowledges these are 'partially seasonal', but this doesn't really illustrate the full problem with using them in this way. Taking every month of LSL data since January 2009 and placing it into a graph shows the huge problem with doing this:

By taking only the October to January fall [the yellow-shaded areas], Mr Cameron and Mr Shapps are actually saying very little. Since 2009 this period in the year has always shown falls in rent prices, so the movement seems to be entirely seasonal. The bigger picture clearly demonstrates that private rent prices have been rising on an annual basis which is the only statistically-sound way of using the data in time-series.

Mr Shapps does, however, have a second basis for the rent decreases when he points to the English Housing Survey's latest report.

The report compiles data for 2010/11 and is itself based on a sample of households totalling some 17,500. The Department for Communities and Local Government (DCLG) confirmed to Full Fact that Mr Shapps was referring to this table:

The table demonstrates that the average rent in the private sector in 2010-11 was £160 per week. This is an increase from £156 the previous year and £153 in 2008-09.

While this clearly shows a nominal increase, the DCLG's calculations use real-term rises (i.e. accounting for CPI inflation).

From a base mid-point in 2009 compared to the same point in 2010, CPI inflation rose by 3.1 per cent. Meanwhile, the rent price rises shown here amount to a 2.6 per cent increase on average for the same time period, and 3 per cent on median. This does indeed represent a real-terms decrease since inflation has outstripped rent rises.

Jack Dromey, however, points to different figures in his own comments. His are from the House of Commons Library which in turn used statistics from the Valuation Office Agency (VOA), an agency of HM Revenue and Customs.

The statistics from the Library show that, from June to December 2011, around 50 per cent of 325 different local authorities saw increases in median rent. 11 per cent saw falls in rent levels and 39 per cent saw no change at all.

The VOA data shows that, overall, average and median monthly rent levels for England as a whole have risen slightly from £694 to £698 on average and from £570 to £575 on median.

However, these figures are also presented in nominal terms. So while the rents have increased numerically, in real terms the picture across England as a whole still shows a fall in rent levels, and in fact a larger fall than demonstrated by the English Housing Survey.

Conclusion

The dispute between Jack Dromey and Grant Shapps boils down to the use of very similar figures. While the two point to different datasets, either can be used to show a nominal terms increase in rents or a real terms decrease, and so both are correct within their own terms of reference.

However Mr Dromey's comment that the Housing Minister "got it wrong" is incorrect, since the real-terms fall is evident from both the English Housing Survey and the Valuation Office Agency statistics.

Equally, Mr Shapps and the Prime Minister significantly misuse the LSL Property Services data. Their claims of a fall in private rents on this data cannot be backed up because the data is not seasonally-adjusted. As we have shown the October to January period characteristically shows falls in rent prices, masking rises in rent overall.