Introduction:
The cost of renting a property in England has experienced an unrelenting upward trend, reaching new heights in June, according to the latest Rental Index released by Goodlord. As we enter the busiest season for the lettings calendar, the demand for rental properties remains high, resulting in a significant reduction in void periods. With rental prices at their highest level since September 2022, the market shows no signs of cooling down. Let’s dive into the details of this escalating rental landscape.
Rent Increases Across England:
The Rental Index reveals that rental costs rose in seven out of eight regions monitored by Goodlord in June. The average rent per property in England now stands at £1,148, representing a 3.3% increase from the previous month’s average of £1,111. The region experiencing the largest surge in rental prices was the South West, witnessing a substantial 9% spike from £1,092 to £1,191.
In contrast, the East Midlands was the only region that witnessed a decline in rental costs, experiencing a modest 1.08% drop.
Greater London remains the most expensive region for rentals, with an average monthly cost of £1,965 per property.
Void Periods Decrease as Demand Soars:
The report also highlights a significant decrease in void periods, further emphasizing the escalating demand in the rental market. On average, void periods in England reduced by three days in June, from 19 to 16 days, indicating a 15% decrease.
Notably, the South West, which typically sits in the middle range for void periods, experienced a substantial drop from 20 days to just 11, representing a remarkable 45% decrease. Consequently, the South West had the lowest void periods among all regions in England during June.
Additionally, three other regions witnessed double-digit declines in void periods: the North East (-16%), North West (-15%), and West Midlands (-21%).
However, two regions observed an increase in void periods during June. The East Midlands experienced a 15% rise, with void periods extending from 20 to 23 days. Greater London also saw a 16% increase, with void periods rising from 12 to 14 days.
Implications for the Rental Market:
Oli Sherlock, the director of insurance at Goodlord, shared insights on the current rental market trends. Sherlock expects the upward trajectory of rental prices to persist throughout the summer. The notable decrease in void periods during June is a clear reflection of intensified demand, as tenants eagerly secure properties as soon as they become available.
Sherlock also predicts that prices and demand will likely peak with the start of the academic year. Although the rental market typically cools down during the autumn and winter months, the persistent supply issues may prolong the pressure on rental stock, affecting all stakeholders within the industry.
Conclusion:
June witnessed a continued surge in rental costs across England, reaching the highest levels recorded since September 2022. The escalating demand for rental properties, coupled with a substantial reduction in void periods, indicates a heated rental market as we enter the busiest season for lettings. Industry experts predict that rental prices will remain on the rise throughout the summer, with potential implications for the supply of rental properties in the coming months.