TK Property is happy to report that after setting records in July, rental prices stayed elevated in August, surpassing the £1,400 mark for the second consecutive month, which is great news for property investors, according to the Goodlord Rental Index.
In August, the average rent for a property was £1,438, slightly below July’s record of £1,470. However, rents have increased by nearly 7% year-on-year.
Year-on-Year Rent Increases
The average cost of a new rental home in England was 7% higher in August compared to the same month last year. In August 2023, rents were £1,347, rising to £1,438 in August 2024, an increase of £91 per month.
The South West saw the highest year-on-year increase, with average rents up by 13%. The East Midlands and the North East followed, with both regions experiencing rent rises of over 9%.
The West Midlands and Greater London had the smallest year-on-year increases, with average costs rising by 2-3%.
Record Rents Despite Monthly Dip
After a surge in July, August saw a slight decrease in the average cost of renting a property in England. Rents fell by 2% on average, from £1,470 in July to £1,438 in August. This mirrors the trend from 2023, when rents dipped by 1.5% between July and August.
Despite this reduction, August 2024 rents remained above the £1,400 threshold for only the second time on record, following the first breach in July.
Void Periods
After shortening in July, void periods (the time a property sits vacant between lettings) lengthened in August across all but one monitored region. The average void period increased from 11 days in July to 15 days in August, a 36% rise. This is slightly higher than the 13-day void period recorded in August 2023.
Greater London was the only region to see a reduction in void periods, decreasing from 13 days to 12 days.
Tenant Incomes
The Index noted a decrease in salaries for renters signing new tenancy contracts in August, with average pay dropping from £38,086 in July to £36,719 in August, a 3.6% month-on-month reduction. Year-on-year, salaries have increased by 0.86%, compared to a 7% rise in rents.
William Reeve, CEO of Goodlord, commented: “The rental cost figures from the last two months closely mirror the trends we saw in 2023: a significant surge in July, followed by a slight dip in August, but overall remaining very high. Rents are up 7% year-on-year, while salaries have only increased by 1% over the same period.”
