New templates: Rents drop by 11% as summer heat finally leaves market
The lettings market saw a dip in the price of rents in October after a red hot summer.
The lettings market saw a post-summer dip in the price of rents in October, following three months of rapidly escalating prices across England. According to the latest Goodlord Rental Index, the average rent on new tenancies dropped by 11% over the last month, as the heat of July-September dissipated. At the same time, voids lengthened by 29% - from 14 days to 18 - another signal that demand is cooling as we head into the traditionally quieter winter months.
- Rent prices drop by 11% after soaring summer
- Voids lengthen as rental prices decrease
- Average salaries creep up
- William Reeve, CEO of Goodlord, reacts
Average cost of rent stays high
The average price of rent dipped slightly between July and August, with prices across England coming down by 1.5% to an average of £1,347 per property. Despite not beating July’s Index setting record of £1,367, August 2023 prices are up 10% compared to the same time last year. Average rental costs are also 15% higher than the 2023 year-to-date average.
Prices across the summer are typically driven up by an influx of student lets. This year, this has combined with historic pressures on the rental market; driving up prices to record-breaking highs.
Greater London and the South East saw the biggest rise in average prices
The capital saw an upward swing of +8%, with the South East recording the highest rise, with rents up by +14%.
However, it was a different picture in the North West, which saw a drop of -20% in average prices. This mirrors the pattern seen in the region last year (2022); a major July spike in rents, followed by a more subdued August.
Rents also dropped in the North East (-6%) and the South West (-10%). Both regions saw huge increases in rental costs during July.
Void periods edge up after record-breaking July
Voids also saw a slight cooling off after the intensity of July, with average void periods rising from 9 days to 13 days in August. However, this still makes August the second lowest month for voids since July 2022.
The biggest shift was seen in the South West, where voids rose from 6 days to 13. This was followed by the North West, where averages jumped from 7 days to 14. Both regions also recorded the biggest dips in the average cost of rent.
Greater London and the South East, which both saw a rise in rental costs, recorded no change in average void periods.
William Reeve, CEO of Goodlord, says:
“There were so many records broken in July, it’s not altogether surprising to see a slight dip in average rents and slightly longer void periods during August. However, when you look at the bigger picture, the market is clearly still running extremely hot.
"Year-on-year averages for rental costs are significantly increased, with the £1,300 per month barrier now broken for a second month in a row. September often brings with it the annual peak in prices, so it’s likely that we’ll see another month of high rents and short voids before any seasonal shift in pace kicks in.”
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