The latest lockdown measures appear to have slowed the lettings market somewhat during January, with void periods increasing across the board according to the latest Goodlord Rental Index. However, rents are holding steady despite the slower pace of lettings, and tenants' incomes have improved compared to December.
Voids increase across England
The average void period for a rental property in England rose from 21 days in December (a month which saw a remarkably brisk market) to 24 days in January, as lockdown restrictions and festive delays created some lag on the speed at which tenants finalised lets.
The biggest change came in the North East, where voids jumped from 21 to 29 days. As a result, the North East now tops the table for voids. The East Midlands also saw a marked slowdown; voids increased from 20 to 26 days.
Greater London, the South East, and North West all saw more modest increases of less than 4 days. The South West saw no change month on month.
Rents defy voids to hold steady
It was a less changeable month for rents, which held steady across England despite the varied picture for voids.
The average cost of a rental property in England rose slightly from £866.64 to £875.46. The rise was driven by prices increasing slightly in the East Midlands, Greater London, the North East, North West and South East.
The biggest rise was recorded in the North East, with the region recovering from a month of weaker rent prices in December; the average increased from £685.50 to £732.21. The South West saw average rents drop by 2%. Rental costs held steady in the West Midlands.
Tenant salaries improve
After a worrying dip in the average salaries for tenants in December, January provided a more encouraging outlook. The annual salary of an English renter increased by 6% from £24,930 to £25,175. Similar figures were recorded between July and October 2020. The 6-month rolling average for salaries in England is now £24,653, following a decline throughout November and December 2020.
Tom Mundy, COO of Goodlord, comments: “January was a steady month for the market. Despite the lockdown, the pace of new lets remains encouraging and the rise in voids looks to be directly linked to a small amount of lockdown-induced friction. Rents are holding up well and the latest figures on tenant salaries are also encouraging, although the end of the furlough scheme and its potential impact is still several months away, and something that both letting agents and landlords should bear in mind As we inch towards the one-year anniversary of the initial pandemic-induced turmoil, the lettings markets and all its stakeholders should be heartened by how resilient the current picture continues to be.”
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