Rental index: Rental costs hit 6-month high

The latest Rental Index from the UK’s largest tenancy processing platform, Goodlord, has revealed that rents hit their highest levels since October over the last month. Rents across England rose by over 1% between April and May.

This means rents are now 6% higher year-on-year.

Rents rose in May to hit a new seven-month high. The average cost of a rental property in England is now £1,183. This is a rise of 1.4% compared to April’s figure of £1,166. It’s also the highest rent average recorded since October 2023, when rents on new tenancies were £1,190 per month.

This rise indicates that rents may be heading into their seasonal summer upswing.

The biggest month-on-month change was recorded in the West Midlands, where rents rose by 4%. This was followed by the North West, which recorded a 2% rise.

Year-on-year, average rents in May have increased by 6.4% – a figure consistent with the year-on-year rent rises seen throughout 2024 to date.

The cost of renting a property in England has increased £70 compared to May 2023.

Voids across England lengthened during May, hitting an average of 21 days. This is a rise of two days from April’s average of 19 days.

Average voidage – which is how long a property is vacant between tenancies – is now 11% higher than at the same time last year, suggesting a slight lessening of the imbalance between demand and supply. Twelve months ago, in May 2023, average voids were 19 days.

During May, the biggest shift in void periods was seen in Greater London and the East Midlands. Both areas saw a 20% increase in void lengths.

The average renter signing a new tenancy in May earns an annual salary of £37,095 – up 0.8% on April’s figure of £36,810. The lowest salaries are found amongst tenants in the North East (£30,718) and the highest in Greater London (£49,883). The average age of renters in England during May was 33.

William Reeve, CEO of Goodlord, said, “This month’s data may well have signalled the starting gun on summer price escalations. The coming months are traditionally the busiest season for the rental market and the time when rents peak.

“During 2024 so far, year-on-year rent rises have been fairly consistent – hovering around the +6-7% mark. Rental averages broke the £1,350 per month barrier for the first time in the summer of 2023.

“That means, if this 6-7% year-on-year trend continues, we could be seeing our first £1,400+ rental average being recorded in just a few months time. However, while rents continue to outpace both inflation and earnings, there are some signs of pressures easing, as seen in the void figures.”