UK: Record-Breaking Rents Soar above ￡1,400 for the First Time

In July, the rental market saw a series of record-breaking increases, with average rental costs reaching their highest levels ever, according to the Goodlord Rental Index. The average rent for a property in England now stands at ￡1,470, a 7.5% year-on-year increase that surpassed what many believed to be the rental ceiling set last summer.?

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?At the start of the peak letting season in July, average rents rose by 7.5% compared to the same period last year. In July 2023, the average rental price in England was ￡1,367, a record at the time. However, this July saw that record shattered, with average costs climbing to ￡1,470 – the first time the national average has exceeded ￡1,400.?

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?Regionally, the South West experienced the most significant year-on-year increase, with rents now 10% higher than a year ago. The West Midlands saw the smallest rise, with rents up just 4% compared to July 2023.?

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?Month-on-month, between June and July 2024, rents across England spiked by 20%, driven by strong summer demand. The average rent jumped from ￡1,225 in June to ￡1,470 in July.?

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?Notably, the North West and South West regions saw dramatic increases in rents for new tenancies, with July rents soaring over 40% compared to June. The East Midlands and North East also saw significant month-on-month increases of over 20%. Greater London and the West Midlands experienced more modest rises, with rents up by just over 5% and 3%, respectively.?

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?As rental costs surged, void periods – the time a property remains vacant between tenancies – shortened significantly from 17 days in June to just 11 days in July, a 35% reduction. The North West and South West recorded the shortest voids, at just 5 and 7 days, respectively, both of which saw the largest rental cost increases. Voids are now at a 12-month low, although they are still slightly longer year-on-year, with July 2023 averaging a 9-day void period.?

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?While escalating rents are putting pressure on tenants, there is a small silver lining: pay for renters signing new leases increased in July, with average salaries rising from ￡36,800 in June to ￡38,086 in July, a 3.5% increase. However, this wage growth still lags behind the rapid rise in rental costs.?

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