August proved to be another successful month for the lettings market shows the latest Goodlord Rental Index, as demand from students and young professionals continued to fuel the sector. Rents were up by 2% overall, although some regions fared better than others. Void periods were up by an average of 2 days across the UK compared to July; reflecting an easing of the ‘rush to rent’ which characterised early summer. However, with void periods in most regions still well below their annual average, the market remains strong heading into autumn.
Demand for new properties from students and an influx in high quality homes hitting the market over the summer has seen modest increases in average rental costs across a number of regions.
Greater London, the South East, South West, West Midlands and Wales all recorded a rise in average rents during August. London remains the most expensive place to rent a property - with an average monthly cost of £1,713. This is followed by the South East, where the average cost per property was £1,204 during August. Wales remains the cheapest place in the UK to rent - at £685 per property - despite recording a 2% increase in average rental costs last month.
It was a different picture elsewhere, however. The East Midlands, North East and North West all recorded dips in the cost of rent. The North East saw the biggest drop, seeing average costs decrease by 9% month on month.
After frenetic market activity throughout June and July, last month saw the pace of transactions ease off slightly. The average void period for the UK as a whole increased from 16 days to 18 days. Just one area saw a decrease in void periods during August. In the South East, averages decreased from 15 to 13 days.
The South West was the only region to see a major change during August. Void periods in the area shot up from 10 days in July to 24 days last month. However, the year to date average for the region is 20 days, indicating that June and July were exceptionally busy months for the area, with the normal pace of lettings now beginning to resume. All other regions recorded a slight increase in voids of between 1 and 3 days.
Salaries for the average UK renter held steady during August, barely shifting month on month. It now stands at £24,521 per year (down just £83 pounds on July).
However, it was a slightly more nuanced picture at regional level. Londoners took the biggest salary hit during August, with their average annual salaries dropping by 5.6% - from £36,796 to £34,721. Those renting in the North East enjoyed the biggest gain - a rise of 6%. This takes average annual salaries up to £20,607 (up from £19,433 in July).
Tom Mundy, COO at Goodlord, commented:
“It’s encouraging to see average rents holding up as the market starts to settle into a more predictable pattern. We’re now seeing the frenzied rush to rent of June and July reach its natural conclusion, but demand remains buoyant and an influx of higher quality properties are starting to hit the market - particularly in London and the South East - which are holding prices steady. Last minute university choices have also been keeping lettings in student towns lively during August. Overall, the market picture remains positive as we head into the Autumn.”