"These July figures show another remarkable increase in rents"
- William Reeve - Goodlord
The average cost of a property in England is now £1,470. This is up by 7.5% year-on-year, surging past what some market observers believed could be the ‘ceiling’ on rental costs set last summer.
Year-on-year rents up 7.5%
In July, at the start of what is typically the busiest season for lettings, year-on-year rental averages spiked by 7.5%.
This time last year, in July 2023, the average price of a rental property in England was £1,367. At the time, July's figure was the highest-ever rental average recorded by the Index - a record that has held until now.
However, over the last month, the average cost of a rental property had risen to £1,470 - setting a new record. This is the first time the Rental Index has recorded a national rental average of over £1,400.
Regionally, the biggest year-on-year jump was recorded in the South West, where rents are now 10% higher than they were a year ago. The smallest shift was seen in the West Midlands, where rents are up by a comparatively small 4% compared to July 2023.
Huge monthly rental spike in regions
Month-on-month - between June and July 2024 - there was a huge 20% increase in rents across England. Driven by soaring summer demand, rents jumped up from £1,225 per property in June to the £1,470 average of July.
Two regions saw a staggering increase in rents for new tenancies in July versus the previous month, with July rents jumping over 40% compared to June in both the North West and South West.
Elsewhere, the East Midlands and North East saw demand drive month-on-month costs up by more than 20%.
The smallest changes were seen in Greater London (5%+) and the West Midlands (3%+)
Voids drop like a stone
As you’d expect with a sudden upswing in costs, void periods (the average time a property sits vacant between lettings) shortened from 17 days in June to just 11 days in July across England - a reduction of 35%.
The shortest voids can now be found in the North West, at just 5 days (down from 17) and the South West, at just 7 days (down from 11). Both regions recorded the biggest increases in rental costs over the month. Voids are now at a 12-month low.
However, voids are still tracking slightly longer year-on-year. In July 2023, the average void period was even shorter, at 9 days.
Tenants see an increase in income
Facing escalating rental costs, one factor that may soften the blow slightly for tenants is pay.
The Index recorded a rise in salaries for renters signing new tenancy contracts in July, with average pay up from £36,800 in June to £38,086 in July. This is a rise of 3.5%, although it lags significantly behind the month-on-month increase in rental costs.
William Reeve, CEO of Goodlord, comments: “These July figures show another remarkable increase in rents. We’ve become used to seeing steady year-on-year increases since 2020, but there were indications that the striking numbers set last summer might start to level off.
"This argument has been dramatically disproven. July’s figures have smashed rental price records and set a new baseline for the market’s busiest months. At the same time, voids have notably shortened, further highlighting the squeeze on supply. For tenants, the new Government’s moves to accelerate house building can’t come soon enough.”
