In July, the Goodlord Rental Index reported unprecedented rental prices, marking a new record for the highest averages ever recorded. The average cost of renting a property in England has surged to £1,470, reflecting a significant 7.5% increase compared to the same time last year. This notable rise has surpassed earlier predictions that there might be a ceiling on rental costs, which were set based on market trends observed last summer.
A year ago, in July 2023, the average rental price in England was £1,367. At that time, this figure was considered a historic high, setting a record for the Index. This record stood firm until now, highlighting the rapid escalation in rental prices over the past year. The current average marks a dramatic shift from the previous peak, demonstrating a continuing upward trend in rental costs.
The latest figures reveal how rental prices have defied earlier expectations and continued to climb. The previous high, established last July, was seen as a significant benchmark. However, with the new average of £1,470, the rental market has broken this barrier, indicating a strong demand and ongoing pressures driving rental costs higher.
In the past month, the rental market has reached new heights, with the average cost of a property soaring to £1,470. This marks the first time the Rental Index has recorded a national average rent exceeding £1,400, setting a new benchmark for rental prices across the UK. The previous record was set just a year ago, when the average rental cost in July 2023 was £1,367. The latest figures indicate a substantial increase, reflecting a continuing upward trend in rental costs.
Regionally, the South West has seen the most significant rise, with rents climbing by 10% compared to the same time last year. This sharp increase highlights the region’s strong rental demand and competitive market conditions. On the other hand, the West Midlands recorded the smallest year-on-year increase, with rents rising by a more modest 4% from July 2023. This variation in rental price increases across regions underscores differing local market dynamics and demand pressures.
Month-on-month, the rental market has experienced a dramatic surge. From June to July 2024, rents across England jumped by 20%, a substantial rise from £1,225 in June to the new average of £1,470 in July. This significant increase is largely attributed to heightened summer demand, which has driven up rental prices sharply during this period. The rapid change in rental costs underscores the current intensity of the rental market and the impact of seasonal demand on pricing.
In July, two regions experienced substantial increases in rental prices for new tenancies compared to the previous month. Both the North West and South West saw dramatic jumps in rents, with increases exceeding 40% from June to July. This sharp rise highlights a significant shift in the rental market within these areas, driven by heightened demand.
Other regions also faced notable increases in rental costs. The East Midlands and North East saw month-on-month rent increases of more than 20%, reflecting strong demand and competitive rental conditions. These areas have been particularly active, contributing to the broader trend of rising rents across England.
On the other hand, Greater London and the West Midlands experienced more modest changes. Rents in Greater London increased by just over 5%, while the West Midlands saw a smaller rise of about 3%. These smaller increases suggest relatively stable rental conditions compared to the more dramatic fluctuations observed elsewhere.
Additionally, the average void period for rental properties across England saw a significant decrease. The time it took to fill a vacant property shortened from 17 days in June to just 11 days in July, representing a 35% reduction. This drop indicates a more competitive rental market and quicker turnover of rental properties.
The shortest void periods for rental properties are now in the North West and South West. In the North West, voids have dropped to just 5 days, down from 17 days, while in the South West, they are now 7 days, down from 11 days. These regions, which also saw the largest increases in rental prices over the month, are now experiencing the shortest void periods recorded in the past year.
Despite this, void periods are still slightly longer compared to the previous year. In July 2023, the average void period was 9 days, indicating that although current voids are at a 12-month low, they are still tracking above last year’s figures.
William Reeve, Chief Executive of Goodlord, stated: “The rental figures for July show another significant rise in rents. Although we have been accustomed to steady increases since 2020, it was expected that last summer’s high figures might begin to stabilise. However, this expectation has been proven wrong.”
He added, “July’s data has set new records for rental prices, establishing a new baseline for the market’s peak periods. At the same time, the reduction in voids underscores the ongoing pressure on rental supply. For tenants, the anticipated government measures to boost house building cannot come soon enough.”