Record Breaking Rents and Record Lows in Void Periods: July Rental Market Update

The latest Goodlord Rental Index reveals record-breaking figures in the UK rental market, marking a significant milestone for property investors. In July 2024, the average rental cost in England surged to an unprecedented £1,470, a 7.5% increase from the previous year. This marks the first time the national rental average has exceeded £1,400, breaking the previous high of £1,367 set in July 2023.

Regional Highlights:

• South West: Experienced the highest year-on-year rent increase at 10%.
• West Midlands: Saw the smallest increase, with rents rising by 4%.

Month-on-Month Changes:

• Nationwide rents jumped 20% from £1,225 in June to £1,470 in July.
• The North West and South West saw the most dramatic increases, with new tenancy rents soaring over 40%.
• The East Midlands and North East also experienced significant rises, with monthly costs up by more than 20%.
• Greater London and the West Midlands had the smallest changes, with increases of 5% and 3% respectively.

Void Periods:

Void periods, the time between rental agreements, shortened significantly across England. The average void period decreased from 17 days in June to 11 days in July, a 35% reduction.

• North West: Voids dropped from 17 days to just 5.
• South West: Voids decreased from 11 days to 7.

Despite being at a 12-month low, void periods were slightly longer than the previous year, averaging nine days in July 2023.

Salaries and Rent Affordability:

Salaries for renters signing new tenancy contracts also rose, with the average income increasing from £36,800 in June to £38,086 in July, a 3.5% increase. However, this salary growth lagged behind the sharp rise in rental costs, highlighting ongoing affordability challenges for tenants.

Expert Insight:

William Reeve, CEO of Goodlord, commented on the findings: “These July figures show another remarkable increase in rents. We’ve become used to seeing steady year-on-year increases since 2020, but there were indications that the striking numbers set last summer might start to level off. This argument has been dramatically disproven.

“July’s figures have smashed rental price records and set a new baseline for the market’s busiest months. At the same time, voids have notably shortened, further highlighting the squeeze on supply. For tenants, the new government’s moves to accelerate house building can’t come soon enough.”

Why This Matters for Investors:

For property investors, the latest data underscores the robust and lucrative nature of the UK rental market. The combination of rising rents and decreasing void periods indicates a strong demand for rental properties, making it an opportune time to invest. The ongoing supply constraints and the government's push to accelerate house building suggest that this upward trend is likely to continue, providing a favorable environment for long-term investment returns.

Stay informed and make savvy investment decisions by keeping up with the latest market trends. At Magnate Assets, we are committed to helping you navigate the dynamic UK property market for optimal investment outcomes.