Rents drop 12% in October as market cools off

The rental market in England cooled in October, with monthly rents down by over 12% and year-on-year increases narrowing to an annual low, according to the Goodlord Rental Index.

Voids also lengthened – an additional sign that the intense pressure the market faced between July and September has materially eased.

Year-on-year rent rises keep shrinking

Compared to the 7%+ year-on-year rent rises recorded on several occasions throughout 2024, October saw rents rise by just 4% compared to the same time last year.

This month, the average rent for a property in England was £1,238. This compares to £1,190 in October 2023.

In Greater London, the year-on-year increase in rents was just 2% in October. The highest was recorded in the West Midlands, where year-on-year rents rose by nearly 6%.

Month-on-month rents drop 12%

There was a sharp month-on-month drop in rent compared to September. Prices fell from £1,417 in September to £1,238 in October – a drop of 12.6% (or £179). All regions monitored saw rents fall.

The notable decrease follows an intense period between July and September when escalating rents surpassed the £1,400 barrier for three consecutive months.

The biggest decrease in rents during October came in the South West, where prices dropped by a huge 24%. This was followed by rent reductions of 16% in the South East and 11% in Greater London.

Voids lengthen as demand eases

As the scramble for properties cooled, the impact was also seen on void periods (the length of time a property sits vacant between tenancies). Average void periods lengthened from 15 days in September to 19 days in October – an increase of 27%.

This takes void averages back to their pre-summer levels. Voids last hit 19 days in April 2024 before shortening to their year-to-date low of 11 days in July.

In October 2023, void periods were 18 days, meaning there has been negligible year-on-year change for voids.

Tenants sees salary boost

In good news for tenants, reducing rents came alongside increased salaries. The average salary of renters signing tenancies in October rose by 1.7% – from £37,350 to £37,997.

Year-on-year, this means salaries have risen by 5.15% – a figure which outstrips year-on-year rent rises for the second month in a row.

William Reeve, CEO of Goodlord, said, “If you read between the lines of last month’s figures, there were signs that a market softening was coming down the track – the latest Index bears this theory out. October tenancies brought decreased rents and a squeezing of the year-on-year rises, while salary figures were up modestly.

“These numbers will be welcomed by tenants, who were being pushed to the very edges of their affordability limits over the summer. At the same time, this data indicates that we are ushering in a more manageable period for landlords and agents. They have been working extremely hard to keep pace with market demand, whilst also grappling with a huge raft of regulatory changes coming down the track.”