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Rents in June 2024 rose by 6.7% year-on-year, according to the latest figures from the Goodlord Rental Index.
The Index, which analyses data from tens of thousands of confirmed tenancies, says the average rent for tenancies confirmed in June was £1,225. This is 6.7% higher than figures recorded at the same time last year - in June 2023, average rents sat at £1,149.
Regionally, the most significant year-on-year rise was recorded in the South West, where prices rose from £1,191 in 2023 to £1,347. This is an increase of 13%.
In London, rents broke the £2,000 mark for the first time this year. An average of £2,010 was recorded for properties in the capital during June (up 2% year-on-year).
June traditionally marks the beginning of ‘high season’ for rental prices. Buoyed by demand from students, rents typically peak between June and September. Last year, rents peaked in July at £1,367 per property, on average.
During every year since 2019, the Rental Index has recorded a rise in rental prices between June and July, meaning even higher rental prices should be expected next month.
Between May and June, average rents rose by 4% month-on-month - from £1,183 to £1,225 - with all but one region recording an increase in rents.
The highest monthly rise was recorded in the South West (14%), followed by the North East (4%) and North West (4%)
The smallest monthly rises were recorded in the South East (1%) and Greater London (1%)
The West Midlands saw a very small reduction in average rental prices (-0.42%).
Alongside the rise in rents, voids significantly shortened in June. The average void period - the number of days a property remains vacant between tenancies - was 17 days in June. This is down from 21 days in May, a 19% reduction.
June’s 17 day average was, however, slightly longer than the void period recorded this time last year, in June 2023, when voids were 16 days.
William Reeve, chief executive of Goodlord, comments: “There is a lot of discussion as to whether the pace of rental price rises is starting to slow. The next three months - which typically bring the annual peak in rents - will settle this debate. Right now, if this year’s current trajectory of consistent 6-7% year-on-year rent rises continues, we’ll see new records broken across England.
“And whilst a lot of the current signs indicate that this might be on the cards, we would need to see a very sizeable jump in rents over the next four to eight weeks to surpass 2023 averages. However, it’s safe to say that market demand clearly remains very strong and that this continues to push rents up month-on-month.”
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There is bound to be further rise in average rents imho. Many rental sector mortgages will have had 2 or 5 year fixes, so there will be quite a prolonged phase lag as fixes come off and new fixes (or standard rates) get taken at far higher interest rates than previously, typically doubling to tripling the monthly mortgage interest cost given that BOE base rate has gone from almost zero to above 5% p.a. in the past couple of years - which on single lets at higher LTVs will represent a large part of the monthly rent, even on HMOs now quite a large part. Other asset classes now being preferable for some investors, diminution of rental supply may further exacerbate the problem.
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