The latest Goodlord Rental Index has unveiled striking figures, marking a significant rise in rental prices across England to the highest averages ever recorded.
Unprecedented Rise in Rental Costs
In an extraordinary leap, the average rental cost in England surged to £1,470, marking a 7.5% increase from the previous year and eclipsing the previous high of £1,367 recorded in July 2023. This year’s figures represent the first time the national rental average has breached the £1,400 mark, with July 2024 setting a new benchmark for future assessments.
Regionally, the variation in rental hikes further underscores the growing demand in certain areas. The South West led with a remarkable year-on-year increase of 10%, while the West Midlands observed the smallest increase, at just 4%.
Dramatic Monthly Changes
The month-on-month data paints an even more drastic picture, with rental costs across England experiencing a sharp 20% increase from June to July. The North West and South West were particularly affected, with rents for new tenancies skyrocketing over 40% in just one month. Conversely, Greater London and the West Midlands saw more modest increases of 5% and 3%, respectively.
This spike in rental costs coincides with a reduction in void periods, which decreased significantly from 17 days in June to just 11 days in July, marking a 35% reduction. The North West enjoyed the shortest voids at five days, down from 17, complementing the steep rise in rental prices.
Economic Context and Industry Reaction
Despite the substantial increase in rental costs, the average salary for renters signing new tenancies in July saw a more moderate rise, from £36,800 in June to £38,086 in July—a 3.5% increase. This discrepancy between rising rental costs and slower wage growth adds another layer of challenge for tenants.
William Reeve, CEO of Goodlord, commented on the findings: “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.”
Reeve further highlighted the current housing supply issue, “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.”
The July Goodlord Rental Index provides a stark illustration of the current state of the rental market, emphasizing the need for rapid action to address the imbalance between demand and available housing stock.
