Rental market steady in December as demand stays high
The latest Rental Index from Goodlord shows the rental market remained steady while the average cost of rent slightly decreased.
The rental market remained relatively steady in December, according to the latest Rental Index from Goodlord, with void periods unchanged as tenant demand continues to come up against lack of stock. The average cost of rent, however, decreased slightly during December, which is traditionally one of the quietest periods in the rental calendar.
A modest drop in rental costs reflects a slightly cool December
Six of the seven regions monitored by Goodlord saw a small decrease in the average cost of rent during December. On average, the cost of a property dropped slightly; going from £1,087 in November to £1,071 in December, a reduction of 1.47%.
The biggest drop was seen in the South West where a 2.68% reduction in the cost of rent was recorded; prices dropped from £1,095 to £1,066.
The smallest changes were recorded in the North West and the West Midlands, where rents moved downwards by less than 1% respectively.
The only region to see an increase in the average cost of rent was the North East, which saw a 1.36% increase - with prices moving up from £789 to £800.
Average rental costs are now at their lowest since June 2022. However, 2022 ended with average rents up by 8.7% across England, compared to 2021.
The highest rental prices averages throughout 2022 were found in Greater London (£1,796) and the lowest in the North East (£810), the same regional split as recorded in 2021.
The cost of rent peaked during August 2022, when prices reached a high of £1,227 across England on average. This was the highest ever rate recorded by the Index.
Voids hold steady at 20 days on average
The average void period for a rental in England remained at 20 days during December, with no month on month change in comparison to November.
The most significant shift in void periods was observed in the South West, which saw a 8.7% decrease in voids. This was followed by the East Midlands, which experienced a drop of 8%. There was also a fall recorded for the North East, which saw a 4.5% drop in the average void period in December.
In contrast, Greater London saw the highest percentage increase in voids last month, rising from 12 days to 13 days - a jump of 8.3%. This was followed by the South East, which saw a 5.6% rise in voids, and the West Midlands, which saw a 4.8% increase.
Tenant incomes show slight drop entering the new year
The average income of tenants fell marginally from £31,105 to £30,346 during December, a decrease of 2.4%.
Over the course of the year, however, there was an average increase in incomes across all regions of 11.15%. With rental costs rising by 8.7% during the same period, the average increase in tenant incomes outstripped the pace of rent rises during 2022.
Tom Mundy, COO, Goodlord, comments:
“The pace of lettings held steady in December overall, despite festive breaks and snow-induced slow downs. This is testament to the strength of the market and ongoing demand from tenants. We always expect to see a dip in activity and a drop in rental averages during November and December, so the steadiness of voids and the very marginal shift in rental costs this month mean we’re likely to see a very brisk pace across the lettings market in the early months of 2023.”
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