After a summer of skyrocketing rental prices, England’s housing market took a breather in October, with rents experiencing a notable dip. PropTech firm Goodlord reports that the average rent for new tenancies decreased by a significant 11 percent over the past month, marking a noticeable change in the recent trend. As winter approaches, the housing market seems to be following its typical seasonal pattern, showing a slight cooling in demand, which is reflected in an extended period of voids.
Throughout the summer, rental prices had surged to new heights, breaking records and challenging the budgets of many tenants. However, October saw a shift in the winds, as the average rents on new tenancies reverted back to levels last seen in May and June of 2023. The cost of renting a property in England during October averaged £1,189 per calendar month, marking an 11 percent reduction compared to September’s peak of £1,346. Nonetheless, it’s important to note that even with this decline, the average rent remains seven percent higher than it was a year ago.
The downward trend in rents was evident across all seven English regions monitored by the Index. The most significant decrease was observed in the South West, where rents fell from £1,493 per month to £1,190, marking a 20 percent drop. The South East followed closely with a 16 percent reduction, as average rents decreased from £1,524 in September to £1,284 in October. In contrast, the North East experienced the smallest change, with prices falling from £939 to £870, a seven percent decline.
Not only did average rents drop, but the average void period for rental properties in England also extended in six of the seven regions under observation. The overall voids lengthened by 29 percent, increasing from 14 days in September to 18 days in October. The North East saw a substantial 88 percent increase in voids, rising from 9 days to 17. The South East experienced a 50 percent increase, with voids lengthening from 12 to 18 days on average. The only region that recorded a reduction in void length was the West Midlands, where they reduced from 22 days to 18.
William Reeve, the chief executive of Goodlord, provided his insights on the market’s current state, stating, “We’ve seen the average level of rent on new tenancies drop from September to October every year for the last four years. It’s, therefore, not a surprise to see rental prices dropping this month, although the rapidly escalating prices recorded over the summer could easily have had a knock-on effect later into the autumn this year. The market is still under a lot of strain, and demand continues to outstrip supply, but it’s encouraging to see that seasonal trends are holding strong despite these unprecedented pressures.”
As we enter the winter months, the cooling rental market suggests that tenants may find some respite from the soaring prices of the previous months. However, the persistent demand and supply imbalances remind us that the housing market remains a dynamic and closely watched sector of the British economy.