The latest Goodlord Rental Index reports that rents in England have reached a record high of £1,367 per property in July 2023, due to high demand, low supply and student lets. It also shows that voids have dropped to a record low of nine days, indicating a very tight rental market.
1. Rents at an All-time High:
Rents across England have reached their highest level ever, with an average cost of £1,367 per property. The surge has been particularly noticeable from June to July 2023, with a 19% increase, breaking the previous record set in September 2022.
2. Reasons for the Increase:
This sharp rise is due to several factors:
- High Demand vs Low Supply: Simply put, more people are looking for places to rent than there are properties available.
- Student Lets: As students are securing housing for the academic year, the demand has further increased, particularly for larger properties.
- Interest Rates: Rising interest rates may have influenced the costs.
- Lack of Stock: There are not enough properties to meet demand, which naturally pushes prices up.
3. Regional Variations:
Not all areas experienced the increase equally. Here’s a simple breakdown:
- Biggest Rises: North West (48% increase), South West (45% increase).
- Moderate Rises: East Midlands (21%), North East (25%), South East (6.94%).
- Smallest Rises: Greater London (1.06%), West Midlands (3.46%).
4. Void Periods at Record Low:
Void periods, or the time a property sits empty between tenants, have also plummeted to a record low of just 9 days on average in July. This is great for landlords as properties are being filled quicker.
- Most Improvement: North East and South West (60% and 45% reductions in voids, respectively).
- Least Improvement: Greater London (21% reduction).
5. What the Future May Hold:
According to William Reeve of Goodlord, the data indicates that the rental market may continue to be robust, with the possibility of more records being broken before cooling off in the autumn – “This month’s numbers are quite staggering. In July we do usually expect to see an increase in rents and a reduction in voids – and all indicators pointed to a particularly red hot summer for the rental market, if not the weather. So while the 10% year-on-year increase is a big shift, the sharp drop in void periods is also particularly surprising.”
Conclusion:
For prospective investors, this information paints a vivid picture of a robust and dynamic rental market in England. The high demand and record-breaking rent levels might present opportunities, especially in regions that saw the most significant increases. However, it’s essential to understand the local dynamics and be aware that the trends may change in the coming months. Investing in property always requires careful consideration and consultation with a professional in the field.