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Lettings market ends 2023 with major year-on-year increase in rents

by LLP Staff Reporter
5th Jan 24 1:46 pm

The latest Rental Index from Goodlord has revealed that average rents were nearly 9% higher across 2023 as a whole compared to average rents recorded in 2022.

Despite month-on-month rents dropping slightly from November 2023 to December 2023, year-on-year figures show rents hugely increased throughout the course of 2023, with several records broken during the summer.

Alongside these rises, void periods (the time in which a rented property remains unoccupied between tenancies) also hit historic lows during 2023.

2023 in review – rent rises set multiple new records

Across 2023 as a whole, average rents across England rose by almost 9% when compared to 2022 averages.

In 2022, rents averaged £1,086 per property. In 2023, annual averages were £1,182 – an uplift of 8.8% year-on-year.

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The highest rents of 2023 were recorded between July and September. These record-breaking months saw average rental property costs rise over £1,300 for the first time as tenants scrambled to secure properties amidst a supply crunch.

July 2023 took the title for highest rental averages of the year, soaring to £1,367 per property across England. In contrast, rental averages in July 2022 were £1,239 – 9% lower.

And London took the 2023 regional rental costs crown, with rents hitting a record £2,275 per property during September. In London during September 2022, rents were £2,055 – 10% lower.

Across 2023 as a whole, the North East recorded the cheapest average rents (£874 on average across 2023), with Greater London seeing the highest rents (£1,974 on average across 2023).

December 2023 in review – month-on-month dip fails to dull year-on-year rises

According to the latest Index figures, December 2023 rents were up 7% year-on-year – hitting an average of £1,147 last month compared to the December 2022 figure of £1,071.

December – traditionally one of the quietest months for lettings – saw a small decrease in month-on-month rents, when compared to November figures. Average rents across the UK dipped by 1.7% across England overall during December – a trend typically driven by lower market activity over Christmas.

The highest rents in December were recorded in Greater London, at £1,932. The lowest rents were seen in the North East, where average cost per property came in at £853 – more than 50% lower than rents in the capital.

2023 voids in review –  voids hold fast to regional trends

Voids held steady year-on-year, with the average void period in December 2023 coming in at 20 days – matching December 2022’s average exactly.

However, across the course of 2023, a new average void record was set. England’s overall void average shortened to just 9 days in July 2023.

Regionally, the shortest void period was recorded in the North East, also in July 2023, when void periods hit just 6 days.

Oli Sherlock, Managing Director of Insurance at Goodlord, said, “It’s been a rollercoaster year for the market, with rents ending the year significantly up compared to 2022 figures.

“We’ve seen first-hand the unprecedented levels of demand for rental properties, as a growing tenant population has come face-to-face with the entrenched supply and demand issues facing our housing market.

“The lettings industry has striven to keep pace with this demand, as evidenced by some of the historically low void periods we’ve seen throughout 2023. Many agents will have been catching their breath over December, but it’s looking like 2024 will be another year of high rents, escalating demand, and ongoing regulatory changes which will keep the whole market on its toes.”

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