Demand for Rental Property Remained Strong in December 2022

According to the latest Rental Index from Goodlord, the rental market continued to be busy, with void periods unchanged as tenant demand continues against a lack of availability in the rental market.

It is not surprising to find that the average rental cost dropped marginally during December, which is traditionally one of the quietest periods in the rental calendar due to the festive break.

Six of the seven regions monitored by Goodlord saw a small drop in the average rent in December. On average, the rent of property fell marginally, from £1,087 per calendar month (pcm) in November to £1,071pcm in December, a drop of 1.47%.

The biggest fall was seen in the Southwest where a 2.68% reduction in rent was recorded; rents dropped from £1,095pcm to £1,066pcm.

The smallest changes were recorded in the Northwest and the West Midlands, where rents reduced by less than 1% respectively.

The only region in the UK to see an increase in the average rent was the Northeast, which saw a 1.36% increase – with rents moving up from £789pcm to £800pcm.

Average rents are now at their lowest since June 2022. However, 2022 ended with average rents up by 8.7% across England, compared to 2021.

The highest average rents throughout 2022 were found in Greater London (£1,796pcm) and the lowest in the Northeast (£810pcm), the same regional split as recorded in 2021.

Rents peaked during August 2022, when prices reached a high of £1,227pcm across England on average. This was the highest ever rate recorded by the Index.

The average void period (the time between old tenants moving out and new tenants moving in) for rental properties in England remained at 20 days during December, with no month-on-month change in comparison to November.

The most significant shift in void periods was observed in the Southwest, which saw an 8.7% decrease in voids. This was followed by the East Midlands, which experienced a drop of 8%. There was also a fall recorded for the Northeast, which saw a 4.5% drop in the average void period in December.

In contrast, Greater London saw the highest percentage increase in voids last month, rising from 12 days to 13 days – a jump of 8.3%. This was followed by the Southeast, which saw a 5.6% rise in voids, and the West Midlands, which saw a 4.8% increase.

The average income of tenants fell slightly from £31,105 to £30,346 during December, a decrease of 2.4%.

Over the course of the year, however, there was an average increase in incomes across all regions of 11.15% in tenants’ income. With rents rising by 8.7% during the same period, the average increase in tenant incomes was more than the increase in rents, showing that there was still the potential for tenants to absorb higher rents.

Tom Mundy, COO, Goodlord, commented: “The pace of lettings held steady in December overall, despite festive breaks and snow-induced slowdowns. This is testament to the strength of the market and ongoing demand from tenants”.

“We always expect to see a dip in activity and a drop in rental averages during November and December, so the steadiness of voids and the very marginal shift in rental costs this month mean we’re likely to see a very brisk pace across the lettings market in the early months of 2023.”