England’s rental market showed signs of settling down in November, as average rents dropped and the rate of year-on-year rent increases slowed significantly. According to the latest data from the Goodlord index, rents fell by 3% compared to October, reflecting a cooling trend following a period of intense demand earlier in the year.
In November, the average monthly rent for a rental property in England stood at £1,205, a £33 drop from the previous month’s figure of £1,238. This decline is part of a broader trend where the rental market appears to be adjusting after the peak demand seen during the summer months. As the market cools, landlords are facing longer void periods, with properties taking more time to be let compared to the earlier part of the year.
The slowdown in rental growth has also been reflected in the year-on-year price increases. In October, rents rose by 4% compared to the same time the previous year, which was the lowest rate recorded in 2023. In November, this figure fell even further, with average rents rising by only 3% compared to November 2023. This marks a significant shift in the market, suggesting that the rental price boom may be reaching its peak.
Experts are keeping a close eye on these developments, as the drop in rental prices and the slowing pace of rent increases could signal the beginning of a more balanced market. However, it remains to be seen whether this trend will continue into 2025, as many factors, including inflation, interest rates, and housing supply, continue to influence the rental sector.
In contrast to the recent slowdown in rental growth, rents in August 2024 were still tracking 10% higher year-on-year compared to 2023 rents. This marked a period of heightened rental demand across the country, driven by various factors such as economic uncertainty, population shifts, and a shortage of available housing. As a result, the rental market experienced intense competition for properties, leading to sharp increases in rents, particularly in high-demand areas.
However, the rental market has shown signs of cooling down since then. By November, the average monthly cost of renting a property in England had dropped to £1,205. This represents a £33 reduction compared to the £1,238 recorded in October 2024, and a £38 increase from the same period in 2023, when the average rent stood at £1,167. While rents are still higher than they were a year ago, the overall pace of growth has considerably slowed, reflecting a more stabilised market. The reduction in rental prices in November marks a shift towards more moderate growth after months of significant upward pressure.
Regionally, the rental market experienced varying trends. The North East saw the largest year-on-year increase, with rents rising by 4% over the last 12 months. This was driven by strong demand in certain towns and cities within the region, which saw limited supply and an influx of renters. In contrast, the North West experienced a much more modest increase in rental prices, with rents rising by less than 1% over the same year-on-year period. This highlights the regional disparities in rental growth, with some areas continuing to see strong demand and price increases, while others are beginning to stabilise.
Overall, November saw rents across England fall by almost 3%, marking the second consecutive month of declines. This downturn follows a significant drop in October, when rents were down 12.6% compared to September figures. The cooling of the market in recent months suggests that the intense competition and demand seen earlier in the year may be easing, with landlords and tenants adjusting to new market conditions. The lengthening of void periods, as properties remain vacant for longer, also reflects this shift, indicating that the rental market may be returning to a more balanced state after a summer of high demand. Despite these reductions, rents are still higher than they were a year ago, indicating that the market is in a period of correction rather than a full-scale decline.
The most significant price reduction in November occurred in the North West, where rents dropped by nearly 6%, falling from £1,022 in October to around £966 in November. This decline marks a notable shift in the market, especially after the region had seen more consistent growth earlier in the year. Similarly, the South West, which recorded a staggering 24% drop in rents during October, continued its downward trend in November. Rents in the region fell by another 4%, from £1,259 to £1,210, showing that the market is cooling off after a period of intense rent hikes.
As demand continues to ease through the autumn, the average time rental properties remain empty between tenancies has once again increased in November. Void periods extended from 19 days in October to 21 days in November, just one day shy of the year-to-date high of 22 days recorded in January. This increase represents a 10% month-on-month rise, which, although notable, is not unusual for this time of year. In fact, the void period in November 2023 was only slightly shorter, at 20 days, which shows that this trend is fairly typical during the autumn and winter months when demand tends to decrease.
The most notable increase in void periods during November occurred in the North East and North West regions, where both saw a 35% jump, from 17 days to 23 days. This significant rise reflects the softer demand in these areas, where rental activity has slowed compared to the busy summer months.
William Reeve, CEO of Goodlord, commented on the current market trends, saying: “While October’s statistics were certainly more eye-catching, rents on new tenancies continued to fall in November and year-on-year price increases have again softened. Meanwhile, the lengthening of void periods is to be expected for this time of year, as demand for properties cools after the summer scramble and in the run-up to Christmas.”
He added, “While demand remains consistently high, this less frenzied period of activity will hopefully give agents a welcome breather as they get ready for a seismic 2025 – when the Renters’ Right Bill becomes law.” The bill, which aims to provide greater protections for renters, is expected to bring significant changes to the rental market in the coming year, which could have long-term effects on both landlords and tenants.
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