"Rents are now up 7% year-on-year, but salaries have only recorded a 1% uplift across the same time period: this is really putting the squeeze on tenants, with many likely to be facing affordability issues when they come to renew or take out a new lease."
- William Reeve - Goodlord
After breaking records in July, rents remained sky-high in August - topping the £1,400 threshold for the second month in a row, according to the Goodlord Rental Index.
The average rent for a property in August was £1,438, slightly lower than the record figure of £1,470 recorded in July. Year-on-year, however, rents are up by nearly 7%.
Year-on-year rents continue to climb
The average cost of a new rental home in England was 7% higher in August compared to the same time last year. In August 2023, rents sat at £1,347. Over the last month, this had risen to £1,438 - a rise of £91 per month.
The highest year-on-year shift has, once again, been recorded in the South West, where average rents are up by a huge 13% compared to the previous year. This is closely followed by the East Midlands and the North East, with both regions seeing year-on-year rent rises of over 9%.
The West Midlands and Greater London continue to see the smallest year-on-year rental increases, with jumps of 2-3% in average costs.
Record rents despite month-on-month dip
After rents surged during July, August saw a small decrease in the average cost of a property in England. Rents dipped by 2% across England on average - taking prices down from £1,470 in July to £1,438 in August. This mirrors the same trend in 2023 when rents dipped between July and August by 1.5%.
Despite this reduction, prices in August 2024 remained above the £1,400 threshold for only the second month on record, after the barrier was breached for the first time in July.
And, on a regional basis, it was a more nuanced picture. During August, rents rose across four regions, with the East Midlands, Greater London, the South East and the West Midlands experiencing price rises.
Reductions in rent averages were recorded in the North East, North West, and the South West. The biggest shift was seen in the North West, which experienced a record-breaking increase in rents during July. August was similarly volatile, bringing a 23% drop in costs to the region: moving rents from £1,451 on average in July down to £1,117 in August.
Voids
After experiencing a shortening during July across the majority of England, August brought some corrections to void lengths - the average time a property sits vacant between lettings. During August, voids lengthened across all but one region monitored.
Void periods lengthened from 11 days in July to 15 days in August - an increase of 36%. This is slightly higher than the void periods recorded last year, in August 2023, which sat at 13 days.
Greater London was the only region to see a shortening of voids, with void periods reducing from 13 days to 12 days.
Tenant incomes reduce in August
The Index recorded a reduction in salaries for renters signing new tenancy contracts in August, with average pay down from £38,086 in July, to £36,719 in August - a reduction of 3.6% month-on-month.
Year-on-year, salaries are now up by 0.86%, compared to a 7% rise in rents.
William Reeve, CEO of Goodlord, comments: “Rental cost figures from the last two months closely mirror the trends we saw in 2023; a big surge upwards in July, with August figures dipping slightly but staying very high overall. Rents are now up 7% year-on-year, but salaries have only recorded a 1% uplift across the same time period: this is really putting the squeeze on tenants, with many likely to be facing affordability issues when they come to renew or take out a new lease.
“With interest rates starting to drop and tenant incomes failing to keep pace with rents, there’s a strong argument that we may be nearing a sustainability ceiling on the cost of rent. If they escalate any further, prices will prove simply unaffordable for renters - unlocking a challenging new chapter in the housing crunch.”
