October brought with it a noticeable dip in rental prices, according to the latest Goodlord Rental Index. Specifically, rents dropped by 11%, settling at an average of £1,190. This decline comes on the heels of three consecutive months where prices were climbing at a swift pace all across England.
While this decrease might seem alarming, especially after such rapid escalation, William Reeve, Goodlord’s Chief Executive, puts things in perspective: “We’ve observed the average rent on new tenancies drop from September to October every year for the past four years.”
The Broader Picture: Seasonal Trends vs. Market Strain
Although a decline in October’s rent isn’t out of the ordinary, the intensity of the preceding summer surge might have led some to expect this momentum to continue into the autumn. However, Reeve sheds light on the broader context, emphasizing that “seasonable trends are holding strong,” even when faced with unparalleled market pressures.
Still, it’s undeniable that the market remains tense. Demand continues to exceed supply, but the consistent seasonal patterns offer a reassuring signal for those apprehensive about sudden market shifts.
A Year in Perspective: 2023 vs. 2022
Even with the 11% drop in October 2023, it’s important to measure this against the broader yearly context. The average rent in October 2023 (at £1,189) is still a commendable 7% higher than what was recorded in October 2022 (£1,111). This indicates that, despite monthly fluctuations, the rental market demonstrates a year-on-year growth.
Regional Breakdown: Who Saw the Biggest Changes?
All seven English regions that the Index tracked witnessed a decline in their average rental prices:
- South West’s Significant Slide: This region saw the most substantial dip. Prices plummeted from £1,493 per month to £1,190, marking a sharp 20% drop.
- South East’s Sizable Shift: Coming in next, the South East experienced a 16% reduction in rental prices.
- North East’s Narrow Nudge: At the other end of the spectrum, the North East had the smallest price adjustment. Rents decreased from £939 to £870, resulting in a 7.4% decline.
In Conclusion
For potential property investors and landlords, understanding the rental market’s ebb and flow is paramount. While monthly drops like the one in October might seem concerning, the broader context – from consistent seasonal trends to year-on-year growth – paints a more stable and reassuring picture of the market’s health.