A series of records were broken in July with the highest rental averages ever recorded by the Goodlord Rental Index.
The average cost of a property in England is now £1,470. This is up by 7.5% year-on-year, surging past what some market observers believed could be the ‘ceiling’ on rental costs set last summer.
This time last year, in July 2023, the average price of a rental property in England was £1,367. At the time, July's figure was the highest ever rental average recorded by the Index - a record that has held until now.
However, over the last month, the average cost of a rental property had risen to £1,470 - setting a new record. This is the first time the Rental Index has recorded a national rental average of over £1,400.
Regionally, the biggest year-on-year jump was recorded in the South West, where rents are now 10% higher than they were a year ago. The smallest shift was seen in the West Midlands, where rents are up by a comparatively small 4% compared to July 2023.
Month-on-month - between June and July 2024 - there was a huge 20% increase in rents across England. Driven by soaring summer demand, rents jumped up from £1,225 per property in June to the £1,470 average of July. Two regions saw a way large increase in rents for new tenancies in July versus the previous month, with July rents jumping over 40% compared to June in both the North West and South West.
Elsewhere, the East Midlands and North East saw demand drive month-on-month costs up by more than 20%.
The smallest changes were seen in Greater London (5%+) and the West Midlands (3%+)
Void periods shortened from 17 days in June to just 11 days in July across England - a reduction of 35%. The shortest voids can now be found in the North West, at just 5 days (down from 17) and the South West, at just 7 days (down from 11). Both regions recorded the biggest increases in rental costs over the month. Voids are now at a 12-month low.
However, voids are still tracking slightly longer year-on-year. In July 2023, the average void period was even shorter, at 9 days.
William Reeve, chief executive of Goodlord, commented “these July figures show another remarkable increase in rents. We’ve become used to seeing steady year-on-year increases since 2020, but there were indications that the striking numbers set last summer might start to level off. This argument has been dramatically disproven. July’s figures have smashed rental price records and set a new baseline for the market’s busiest months. At the same time, voids have notably shortened, further highlighting the squeeze on supply. For tenants, the new Government’s moves to accelerate house building can’t come soon enough.”
More older people pushed into rental accommodation
The number of people renting between the age of 55 and 64 has risen by 80% in a single decade, suggesting the cost of housing is pushing more people out of owning for life.
The statistics, from buy-to-let lender The Mortgage Works, found that nearly 20% of rented households are for those over 55 years old. The proportion of 55- to 64-year-olds living in property they own has dropped by 10% in the past decade.
Damian Thompson, director of landlord at The Mortgage Works, said “understanding the dynamics of the private rented sector has never been so important. The sector continues to support the lives of millions of people across the UK by providing homes for those who either can’t afford to buy or prefer not to own a home. We look forward to understanding the new government’s plans to create a stronger, fairer private rented sector, where legislation works for both landlords and tenants."
The research also reveals that smaller landlords are increasingly dominated by big players, as the proportion of landlords with more than five properties has trebled between 2010 and 2021.
With around 350,000 buy-to-let fixed-rate mortgages set to mature in the next year, remortgaging landlords face potential payment shocks of around £225 per month.