Rental Market Report: Rents Remain Hot Across England

Rental Market Report: Rents Remain Hot Across England

The August Rental Index from Goodlord reveals a persistent surge in the rental market, with a notable 10% year-on-year increase in average rental costs. Void periods, while showing a slight uptick, still maintained levels significantly lower than year-to-date averages.

The Goodlord Team

In the most recent Rental Index report released by Goodlord, the rental market in August maintained its impressive momentum, showcasing a remarkable 10% year-on-year increase in rental rates. This ongoing surge in rental prices has persisted despite a slight dip from the record-breaking July, during which average rental rates exceeded the £1,300 mark for the first time. As a result, tenants are still contending with elevated costs during this peak rental season.

It’s worth noting that while August saw a modest easing of void periods compared to the historically low figures observed in July, these periods still remained significantly below the year-to-date averages. This trend underscores the continued demand and competitiveness in the rental market during this period.

Key Highlights:

  1. Average rental costs continue to soar.
  2. Greater London and the South East observed the most significant surge in average rates.
  3. Slight increase in void periods post a record-breaking July.
  4. Insights from William Reeve, CEO of Goodlord.

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The Persistence of Elevated Rental Costs: Comparing the months of July and August, there was a marginal decrease of 1.5% in the average rental prices throughout England, with the figures now resting at an average of £1,347 per property. Although August 2023 didn’t surpass the record-breaking heights set in July, when the average rental price reached an impressive £1,367, it is essential to note that it still represented a substantial 10% increase when compared to the same period in the preceding year.

Moreover, it’s clear that rental expenses for the entire year of 2023 have consistently remained significantly higher, with a staggering 15% difference from the year-to-date average. This sustained level of elevated rental costs underscores the challenges faced by both tenants and those in the rental market, indicating a sustained trend of high pricing.

The summer season typically sees a surge in student lets, which, combined with existing pressures in the rental market, has driven prices to unprecedented heights this year.

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Regional Variations: In terms of regional disparities, Greater London experienced an 8% increase, while the South East recorded the most significant jump at 14%.

However, a different trend emerged in the North West, where average prices dropped by 20%, resembling the pattern observed in the region in the previous year (2022) with a major spike in July followed by a more subdued August.

The North East (-6%) and the South West (-10%) also witnessed declines in rental rates, after both regions had seen substantial increases in July.

Void Periods Show Modest Rise Post Record-Breaking July: Void periods also exhibited a slight cooling-off effect after the intensity of July, with the average void period increasing from 9 days to 13 days in August. Nevertheless, August still retained its status as the second-lowest month for voids since July 2022.

The most significant shift was noted in the South West, where void periods increased from 6 days to 13 days, followed by the North West, where averages climbed from 7 days to 14. Both regions also experienced the most significant declines in average rental costs.

Greater London and the South East, where rental costs rose, saw no change in average void periods.

William Reeve, CEO of Goodlord, comments: “While August may have seen a slight dip in average rents and slightly extended void periods following the plethora of records set in July, the broader perspective reveals that the market remains remarkably robust.

“Year-on-year rental cost averages have witnessed substantial growth, with the £1,300 per month threshold now breached for the second consecutive month. September typically heralds the annual peak in prices, so it’s likely we’ll witness another month of high rents and short voids before any seasonal shifts in pace come into play.”

At Magnate Assets, we believe in arming investors with valuable knowledge to navigate the property landscape with confidence. Rental yield isn’t just a metric; it’s a window into the profitability of your investment journey. As you embark on your investment endeavors, remember that rental yield isn’t just a number—it’s the key to unlocking the potential of your property portfolio.

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