The cost of rent has continued to rise across the majority of England’s regions for many months now, outpacing the rate of house price rises.
Buy-to-let landlords renting out properties across the majority of the country’s towns and cities are experiencing rent rises at a faster rate than their capital appreciation at the moment. Rental costs are being driven up by a number of factors, from supply falling short of demand to landlords passing on additional expenses to tenants.
Now, the average rent being paid on buy-to-let property in England has hit £1,148 per month, which is 3.3% higher than the figure of £1,111 recorded in May, according to the latest research from Goodlord.
Every region apart from the East Midlands saw its rental prices rise month-on-month; the East Midlands recorded a fall of -1.08% between May and June. This marks the sixth consecutive month when average rents across the country have increased.
Rent hikes in the south west
The south west of England recorded the most significant monthly surge in its rental prices, says Goodlord, with a huge 9% increase from £1,092 per month to £1,191 per month. This means the average tenant in the south west is paying higher than the national average.
The pattern of the south west jumping above the national average mirrors what happened in summer last year, when the region’s average rent rose to a peak of £,1540pcm – while the national average was £1,239pcm – before falling back down in October 2022 to more closely align with the average.
Meanwhile, the cost of rent in Greater London remains significantly higher than all other regions, at £1,965pcm, according to Goodlord’s data. This is a reasonable increase from the £1,903pcm recorded in May.
The parts of the country that remain the best value for renters – and the only three regions to remain below the national average – are the north east (where rents are now £865pcm), the north west (£917pcm) and the West Midlands (£919pcm).
House prices in these regions are also relatively affordable for buyers and investors, despite their strongly performing markets, and the north west in particular is known for achieving high yields in its rental market.
Less homes sitting empty
One of the key ways that landlords can sometimes lose money is through void periods, where a property sits empty after a tenant has moved out and before a new one has moved in. This is why investors tend to target areas of particularly high tenant demand, where rental homes are snapped up quickly.
According to Goodlord, void periods fell by an average of three days in England in June, bringing them down to just 16 days from May’s 19 days. This is a 15% reduction, and can make a big difference to landlords.
Again, the south west outperformed in this area, as it recorded the most significant fall in void periods as demand for property surged. While the average length of time a home sat empty in May was 20 days, in June this fell to just 11 days in the region, which is a 45% drop and is the lowest figure recorded.
Other top performers – all three of which were mentioned above as having the country’s lowest rents – were the north east, where voids fell by -16%, the north west (-15%) and the West Midlands (-21%). Unlike rents, though, void periods can see much larger month-on-month fluctuations.
Continuing trends through the summer
Oli Sherlock, director of insurance at Goodlord, said: “We’ve now seen six consecutive months of price rises and we predict this to continue throughout the summer. The fairly sizable drop in void periods during June also reflects this intensification of demand, as tenants snap up properties as soon as they come on the market.
“We’ll likely see prices and demand peaking as we hit the start of the academic year and, whilst things normally begin to cool down over the autumn and winter, if supply issues continue we could see this pressure on rental stock continue, affecting all industry stakeholders.”
