July was a record breaking month for the rental market, claims a PropTech company.
Goodlord analyses tens of thousands of completed tenancies each month, and says last month saw the highest average rental costs since at least 2019.
As rents soared, void periods also dropped dramatically. This set another record: the shortest void periods ever recorded by the Index.
The company says pressure on rental stock has been increasing over the last year. The summer months are traditionally the busiest time for the market, typically thanks to a surge in student lets across July, August and September.
The pace of student lets, combined with rising interest rates and lack of stock, is likely to have created this unprecedented upward pressure on prices, Goodlord claims.
In detail, in July the average cost of rent in England hit £1,367 per property. This is 9.4 per cent higher than the previous record, set in September 2022, of £1,249.
July’s average cost of rent was, at £1,367, 19 per cent higher than June’s averages, when rents sat at £1,148 per property. This is a huge month-on-month increase: the average month-on-month increase in rent during the year to date has been 1.3 per cent.
Rents on tenancies completed in July rose by 10 per cent year-on-year.
Goodlord says the volume of larger, more expensive properties being let to groups of students in July ahead of the new academic year contributed to this rapid rise in average costs, as well as ongoing pressures to rental stock across the country.
Geographically, rents rose in every region monitored by the Index.
There were significant uplifts in average rents in the North West, which saw a 48 per cent annual rise in prices (£917 to £1,358), and the South West, which saw a 45 per cent annual increase in average prices (£1,191 to £1,725).
Greater London, the South East and the West Midlands all saw more modest increases.
The West Midlands is currently the cheapest region for renters, with Greater London the most expensive.
William Reeve, chief executive of Goodlord, says: “This month’s numbers are quite staggering. In July we do usually expect to see an increase in rents and a reduction in voids - and all indicators pointed to a particularly red hot summer for the rental market, if not the weather.
“So while the 10 per cent year-on-year increase is a big shift, the sharp drop in void periods is also particularly surprising.
“Digging into the data, we can see a large number of multiple occupancy student lets being confirmed during July, which has pushed up average prices in key regions such as the North East and South West.
“Traditionally, rental costs continue to increase until September before cooling off in the autumn, which could mean these aren’t the last records we’ll see broken before the year is out.”
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Now let me think 🤔 selling up , selling up and erm selling up 🎉💰
Spot on Simon. Renters Reform bill responsible for the large number of landlords leaving the sector. There are those who want to deny the reality of that.
And in Scotland more than nine out of ten agents have seen landlords express a desire to withdraw from the private rental sector.
What idiot wants to sell when there’s a record increase in rents? I cannot see anything in the renters reform bill to worry about but that may be just me. I like to give my tenants security I want them is to stay forever. I will only evict for cause, which is always wilful refusal to pay rent. It seems that the bill might make it easier to evict for cause not that I am holding my breath on that happening . EPCs increase is unlikely to happen, and there will be exemptions.
Jim Haliburton, the HMO, daddy
Those of us that do stay will be earning more rent and have a greater selection of tenants to chose from, will we be able to get rid of non payers? that depends on the courts, it is looking possible that net zero might be scrapped along with that the EPC BS hopefully
There's lots to worry about:
The ombudsman for a start. Tenant complains to you, you say no, they go straight to the ombudsman for a guaranteed yes, an apology from you and compensation.
S21 going. Yes you say you don't care but it's a healthy deterrent that promotes good tenant behaviour. Without it even good tenants will be free to turn bad.
There's lots of other stuff but I'm too busy to pull your head out of the sand.
I am afraid that Nick is right. It seems good to have a greater choice of tenants, but personally I don't think it is possible to operate a business when the whole letting framework has left landlords with no power at all. As Nick said before, too, requirements and rent controls will only become more onerous for landlords once sitting tenants have been installed.
If you carry on Andrew, you might be as well to consider your letting model - perhaps provide services so you can remove people who don't pay up.
The slow grind of the machine to make OUR decisions on OUR properties subject to a judge giving the 👍🏻 . The reason for a lot of us though, including me, is time/age. The majority of us don’t have rafts of properties we will have one to three, and we can use the capital built up to benefit our children and enjoy our final years. No point being the richest person in the graveyard 🪦.
Could it be that any landlords with mortgages realise the fix they had or have will be replaced with something much more expensive?
Five of my fixes end or have already ended this year. Payments will have increased by about £2500 a month by December. Then Section 24 also has to be taken into account so increases have to be even bigger.
Because there is a time lag due to only increasing rents once a year? Mine go up next month as I gave my tenants 6 months notice of an increase of just over 10%. As things stand they will get another increase above 10% next year due to mortgage interest having gone up so much so quickly.
I was hoping to stick with a 7% increase this year but after yesterday's rate rise it's going to have to be around 10%.
It won't come anywhere close to covering the extra mortgage interest and Section 24 tax but every little helps.
At least the rent increases on newly vacated rooms are much higher and the competition for them is staggering.
Watch what’s coming down the pipeline in England. In Scotland we can only raise rents by 3%, or 6% if you go to a tribunal where one landlord had to supply 44 pieces of paper and show hardship before she could sell and that’s IF the tenant moves out. Meanwhile mortgages are going up £250/£300 per month! A fat lot of good an extra £24 makes!!
What makes us angry is it’s all about “poor renters”
This is my real fear, they will trap us so we cannot sell 🆘
I agree the Rent Reform Bill and what will follow is staggeringly obvious that we will not be able to get rid of bad tenants, unable to increase rents, increasing cost of borrowing, EPC regulations, when this measurements are subjective, may not be be able to sell, as tenants refuse to leave or pay rent, capital gains may become prohibitive to sell. As one tenant said to me in early 2019, I do not have to visit at all for inspection or any work that's needs doing as the house was his. He had stopped paying rent after the first 2 months. I lost 10 months rent after court and bailiff got involved. 2 days after they left, they did some damage to the rear of the property. The neighbour got it on their cctv, so they phoned me. By that time the police had called me as well. This is because police station is nearby, across the road. Neighbour would not give us the recording so police could not charge them. I am afraid, if the rent generation and other charities who are fighting for the RRB do not wish to face the truth. The government is responsible for social housing, rent arrears and all the admin and maintenance issues so they need to buy stock for social housing tenants not get these tenants to be dumped on landlords, who are attempting make a living through providing a home for tenants who pay rent on time and take their responsibilities and liabilities seriously. The govt needs to educate the tenants to be responsible citizens. There are a lot of regulations against the landlords. Strict guidelines and regulations for the tenants and assistance to landlords to get rid of unruly and non paying tenants. This may provide confidance to the LLs that there is help for them too, so they will be to able to rent to social housing tenants as well
Building dignity for tenants and LLs is very essential rather than blaming just LLs for everything. LLs are not tenants' parents but sometimes it seems like that.
Well said. We are on a steep downward spiral where we are expected to act like the tenants' parents and with no control over them whatsoever.
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