July was a record breaking month for the Goodlord Rental Index. The Index, which analyses tens of thousands of completed tenancies each month, saw the highest average rental costs since the Index’s launch in January 2019.
As rents soared, void periods also dropped dramatically. This set another record: the shortest void periods ever recorded by the Index.
Pressure on rental stock has been increasing over the last year. The summer months are traditionally the busiest time for the market, typically thanks to a surge in student lets across July, August and September. The pace of student lets, combined with rising interest rates and lack of stock, is likely to have created this unprecedented upward pressure on prices.
Average cost of rent surges past £1,300 for first time
In July, the average cost of rent in England hit £1,367 per property. This is the highest level ever recorded by the Index and is 9.4% higher than the previous record, set in September 2022, of £1,249.
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July’s average cost of rent was, at £1,367, 19% higher than June’s averages, when rents sat at £1,148 per property. This is a huge month-on-month increase: the average month-on-month increase in rent during the year to date has been 1.3%.
Rents on tenancies completed in July rose by 10% year-on-year.
Goodlord experts believe the volume of larger, more expensive properties being let to groups of students in July ahead of the new academic year contributed to this rapid rise in average costs, as well as ongoing pressures to rental stock across the country.
Huge rental cost rises in the North West and South West
Rents rose in every region monitored by the Index. There were significant uplifts in average rents in the North West, which saw a 48% rise in prices (£917 to £1,358), and the South West, which saw a 45% increase in average prices (£1,191 to £1,725).
Rest of England sees rents trend upwards
In July, there were also significant rent increases in the East Midlands (21%) and the North East (25%).
Greater London, the South East and the West Midlands all saw more modest increases.
The West Midlands is currently the cheapest region for renters, with Greater London the most expensive.
Voids plunge to hit record low
As the cost of rent spiked, voids headed in the other direction: dropping by 44% to hit an average of just 9 days in July.
This is down from 16 days in June and is the lowest ever void rate recorded by the Index. The previous record was set at 10 days in July 2022.
The North East and the South West saw the lowest voids – recording void periods of just 6 days on average. This, respectively, represented a 60% and 45% reduction compared to June’s void figures for those regions.
The highest voids were recorded in the West Midlands at 14 days, a decrease of 22% compared to June.
Greater London saw the smallest month-on-month change: a 21% reduction in voids, from 14 days to 11 days.
William Reeve, CEO of Goodlord, said, “This month’s numbers are quite staggering. In July we do usually expect to see an increase in rents and a reduction in voids – and all indicators pointed to a particularly red hot summer for the rental market, if not the weather.
“So while the 10% year-on-year increase is a big shift, the sharp drop in void periods is also particularly surprising.
“Digging into the data, we can see a large number of multiple occupancy student lets being confirmed during July, which has pushed up average prices in key regions such as the North East and South West.
“Traditionally, rental costs continue to increase until September before cooling off in the autumn, which could mean these aren’t the last records we’ll see broken before the year is out.”