The latest Rental Index from Goodlord reveals encouraging trends for property investors in the UK, with rents on the rise and void lengths decreasing during February.
According to the data, the average rental cost of properties in February 2024 remains notably higher than the same period in 2023, with a 7% increase recorded year-on-year.
During February, average rents experienced a 1% uptick, reaching £1,162 per calendar month (pcm) in England, up from £1,154pcm in January. This steady increase defies historical patterns, as rents typically dip in February following the post-Christmas period; however, recent figures from the Index show a departure from this trend, with February rent rises being atypical.
Analyzing the year-on-year data for February 2024 compared to the corresponding month last year, the South West emerges as a hotspot for rental growth, experiencing a significant 11% increase in prices. Following closely is the North East, where rents have risen by 7.5% year-on-year.
Conversely, the West Midlands witnessed the smallest year-on-year change, with tenants paying 4.5% more in rent compared to the same period last year.
The biggest regional rise in rents during February came in the South West and the South East, where rents rose by 2.5%. The average price of rental property in the South East is now £1,293, with the South West not far behind at £1,173.
Although overall rents rose across England by 1%, two regions saw a drop in prices during February. Rents in the West Midlands dipped by 2% and Greater London also saw a decrease, with rents dropping by 1%.
Further illustrating the continued demand for rental properties across England, void periods – the duration between tenancies when a property is vacant – witnessed a noteworthy reduction during February.
On average, void periods decreased from 22 days to 18 days across England, marking an impressive 18% reduction. The North East experienced the most significant change, with voids shortening by 29%, plummeting from 24 days in January to just 17 days in February.
Across all regions, void periods saw decreases, except for the South West, where void periods remained stable at 20 days month-on-month.
William Reeve, CEO at Goodlord, remarked on the unusual rental trend observed in February, stating, "Traditionally, February sees a lull in rental activity after the peak demand in January following the festive season. The unexpected rise in rents this month underscores the persistent pressure on the market and the scarcity of available properties – a situation further underscored by the reduction in void periods across England."
He continued, "Currently, the market is yielding relatively consistent year-on-year rent increases, hovering around the 7% mark. It remains to be seen whether this trend will continue into the summer, following last year's record-breaking figures, or if we'll witness new records being set."