The lettings market concluded 2023 on a high note, experiencing a substantial year-on-year increase in rental prices, as disclosed by Goodlord’s latest Rental Index. The data shows that average rents across 2023 were nearly 9% higher than those in 2022, with December witnessing a 7% increase compared to the same period in the previous year.

While rents in November to December 2023 saw a slight decrease, the overall trend for the year was one of significant growth, including several record-breaking months during the summer. This increase in rents coincided with historic lows in void periods throughout the year.

In a detailed breakdown, the average rent across England in 2022 was £1,086 per property, whereas in 2023, it escalated to £1,182, marking an 8.8% increase year-on-year. The peak in rental costs was observed between July and September 2023, with averages surpassing £1,300 for the first time, driven by a supply crunch.

July 2023 emerged as the month with the highest rental averages, reaching £1,367 per property, a 9% increase from £1,239 in July 2022. London, in particular, saw a significant jump, with rental costs peaking at £2,275 per property in September 2023, a 10% rise from £2,055 in the same month in 2022. The North East reported the lowest average rents at £874 in 2023, while Greater London had the highest at £1,974 on average.

Oli Sherlock, Managing Director of Insurance at Goodlord, commented on the year’s dynamics: “It’s been a rollercoaster year for the market, with rents ending the year significantly up compared to 2022 figures. We’ve seen first-hand the unprecedented levels of demand for rental properties, as a growing tenant population has come face-to-face with the entrenched supply and demand issues facing our housing market.”

Sherlock also noted the lettings industry’s efforts to meet this demand, evidenced by historically low void periods. He concluded, “Many agents will have been catching their breath over December but it’s looking like 2024 will be another year of high rents, escalating demand and ongoing regulatory changes which will keep the whole market on its toes.”