Voids plummet as rents rise, new data shows

Rents increased for the fifth consecutive month in June as voids continued to fall, according to the latest rental index form Goodlord.

The data reveals that rents rose by an average of 2.8% during June, taking the average cost of a rental property in England from £1,020 to £1,050 per month.

An increase in rental costs was recorded in seven out of the eight regions monitored by Goodlord, led by gains in the South West, where a sizeable 10% increase in the cost of rent was recorded. A large rise was also recorded in the North East – the home of the cheapest rents in the country – where costs rose by 8% over the last month.

The only region to record a decrease was the West Midlands, where a 2% reduction in prices was recorded.

This is the fifth consecutive month of rising prices for rental homes in England, following a slight cooling of costs over the winter months. Average prices in June are, however, still below the record breaking highs recorded in September 2021, when prices hit £1,104 per property.

In a further reflection of ongoing market demand, voids dropped by 10% during June. The average void period for a property in England is now 17 days, down from 19 days in May.

At a regional level, this included some dramatic reductions. In the North East, voids dropped by 35%, moving down from 20 days to just 13. The South West saw a 30% drop and the South East 25%.

Once again, the West Midlands was the only region to buck the trend – seeing a 20% increase in void periods. The West Midlands now has the highest void periods in the country at 24 days, the longest void average recorded for any region since January 2022.

The rental index also reveals that tenant salaries are up very slightly month on month, with a rise of less than 1%. The average take-home pay for a renter in England is now £29,275.

This is 14% higher when compared to year-on-year averages. This rise in salaries outstrips the 9.33% year-on-year increase in the cost of rent recorded over the last 12 months.

Tom Mundy, COO of Goodlord, commented: “It’s safe to say that there’s a huge amount to contend with in the lettings sector right now. We’re heading towards what tends to be the busiest season for rentals with a market that’s already extremely busy thanks to high demand and low stock.

“Add to this the major changes coming up as a result of the Renter’s Reform Bill and we’re on track for a hugely impactful few months for both agents and landlords. Things are set to be intense for the foreseeable future; all stakeholders must make sure their operations are as streamlined as possible if they want to engage effectively with the current market.”

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