Rents hit eight-month high

The cost of rent in the UK hit an eight-month high in May, new figures show.

Prices have steadily increased over recent months and are now nudging the record set in September 2022. At the same time, voids have held steady month-on-month, although the regional data paints a more varied picture on the ground, and tenant salaries have dipped.

According to the Goodlord Rental Index, the average cost of rent in England reached £1,020 per property in May, up 0.83% on April’s figures.

This surpasses averages recorded for the previous eight months. The last time prices rose above £1,020 was September 2021 – peak season for the market – when rent averages hit £1,104. Overall, the cost of rent has now risen by 11% year-on-year.

The biggest change in the cost of rent during May was seen in the East Midlands, where prices rose by 2% per property (up to £867 per month). The only region to see a dip in the cost of rent was the North East, where costs dropped by 2.7% over the last month (down to £728).

Rental prices in Greater London remain far and away the most costly – averaging £1,723 in May and now up 13% year-on-year. In the North East, at £728 per property, rents remain the cheapest, although this is still 11% higher than this time last year.

The average void period held steady between April and May. Overall, the average voidage for a property in England in May remained at 19 days.

At a regional level, however, the picture was slightly more chequered.

The East Midlands, North East, and West Midlands all saw a reduction in voids of between 9-10%.

However, Greater London, the North West, South East and South West all saw voids rise. The increase was the most stark in the North West, where voids jumped from 17 days to 22 days – an increase of 29%.

After five months of consistently rising averages for tenant take-home pay, May saw a slight dip in average salaries. They decreased from £30,044 in April to £29,247 in May –  a 2.7% reduction.

Average incomes are highest for tenants in London – the most expensive place to rent – at £42,955 per year. And they are the lowest for tenants in the North East – the cheapest place to rent – at an average of £24,350 per year.

Tom Mundy, COO at Goodlord, commented: “With the squeeze on available stock, we’re not surprised to see rents continuing to climb as we head into summer. Void periods have started to fluctuate that bit more, which offers an early indication that the market is beginning to settle down following a long run of consistently high demand.

The message to agents and landlords, however, remains very much the same; there is a huge consumer appetite for good quality rental homes and this shows no sign of abating.”

SOURCE: Property Industry Eye | JUNE 1, 2022 | MARC DA SILVA