UK landlords are filling their rental properties faster than ever, with the north west of England seeing the biggest fall in average void periods in the sector.
The UK’s private rented sector saw a “reinjection of pace” in February, according to the latest figures released by Goodlord, as ongoing high levels of demand are keeping properties tenanted with fewer gaps between each contract.
Keeping void periods low is one of the key goals of a buy-to-let landlord, as while ever a property sits empty after a tenant has moved out, rental income is being lost which lowers the overall return at the end of the year.
In the latest analysis of the length of time the average property sits unoccupied in the rental sector, it seems that UK landlords are getting new tenants in remarkably quickly – a sign that the high demand seen from renters in recent months is ongoing, and perhaps getting stronger.
Void periods down by a quarter
Average void periods can be a good marker of the strength of the rental market, demonstrating the level of competition between tenants for each rental home from the point at which is goes on the market. We already know that supply in the sector is lower than demand, and UK landlords are seeing their homes snapped up quickly.
Goodlord’s statistics show that the average void period in England in February fell by a huge 26%, from 23 days to 17 days, which will make a huge difference to the bottom lines of many landlords.
In the north west of England, the drop in the length of time the average home sits empty was even more pronounced, the a 33% fall from 27 days in January to 18 days in February. Similarly, UK landlords in the East Midlands saw void periods decline by 31%, from 29 days to 20 days.
Other areas with strengthening tenant demand and fast turnarounds between tenancies were Greater London, the north east, south east and the West Midlands. All these areas recorded falls of more than 20% in their void periods, indicating that in fact almost all UK landlords were experiencing strong demand.
Goodlord notes that the current figures are the healthiest seen since September last year, when the average void period seen by UK landlords was 15 days.
Toby Burgess-Smith, data analyst at Goodlord, says: “The rental market saw a re-injection of pace in February as voids dropped by a quarter and rents rose, according to the latest Rental Index from Goodlord. The latest data indicates renewed rental market momentum, after the traditionally quieter months of December and January.”
Strong rents and higher salaries
According to Goodlord’s report, not only have rents for UK landlords been on the rise – which is no surprise when considering the steep competition in the sector – but average tenant salaries have also been increasing, adding to affordability.
The average cost of a rental home in February was £1,089, which was 1% higher than January’s data. While this is actually lower than the average rents coming in in September, it is the highest the average rental price has been since October.
Meanwhile, the average salary of a tenant in England in February was £32,168. This is 11.7% higher than a year ago, meaning it is only slightly behind the overall annual rent increase when taking the whole of the UK into account.
On a regional level, though, affordability in both the north west and the south west has actually improved for tenants, with both seeing average salaries rise at a faster rate than rents.
UK landlords need support
Tom Mundy, COO of Goodlord, says: “December and January are traditionally slightly quieter times for the lettings market and, given the intense demand the rental sector has seen over the last year, I’m not surprised to see how pace has increased during February.
“The big drop in voids is a clear reminder that housing stock is low and tenants are moving quickly to secure properties – everything listed is getting snapped up extremely quickly. This is linked to the renewed increase in rental costs.
“Although we’re not at the cost averages we saw during last summer and early autumn, the price per property averages are significantly higher than this time last year.
“These trends are being intensified by a rise in landlords leaving the market, pointing to an urgent need for decision makers to incentivise landlords to stay in buy-to-let whilst ramping up house building efforts.
“We believe the industry is facing unsustainable pressures and repeat our call for the Government to rapidly take meaningful action to help landlords and tenants alike.”
