New Data Shows Higher Rents as UK Rental Market Heats Up

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Demand for Rental Properties is Keeping Rent High and Void Periods Low

The most recent rental index published by Goodlords has revealed some promising data for the UK buy-to-let investment market.

According to the index, regarding data about England from February 2024, the trend of rapidly increasing rental costs is continuing as the supply-demand imbalance in the private rental market persists in pushing rental inflation upward.

The report also found that void periods are reducing, meaning properties are being tenanted more consistently and landlords are receiving more monthly rental income.

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Rental Trends in February 2024

The data shows that average rent in England went up by 1% last month when compared to January. This takes the average cost from £1154 to £1162, according to Goodlord’s index. Rents have actually dropped month-to-month between January and February four out of the last six years, meaning this February increase is out of the ordinary.

While the overall average showed a 1% rise, two regions saw a dip in prices last month. Rents in Greater London fell by 1%, while the West Midlands saw a decrease of 2%.

Looking at the yearly change, rents are up 7% when compared to February 2023. This is a promising figure for those who are considering buy-to-let as a way of investing for a monthly income.

William Reeve, CEO of Goodlord, commented:

“Right now, the market is delivering fairly consistent year-on-year stats when it comes to rent rises, and we continue to hover around the 7% mark. All eyes will be on whether this starts to reduce as we come into the summer following last year’s record-breaking numbers, or if new records will be set.”

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Void Periods Shorten During February

A void period is the length of time a property is vacant between tenancies, and according to Goodlord’s index, the average void period was shortened during the last month. This is a testament to the continuing sky-high demand for rental properties across the country, as it suggests that renters stay in properties for longer and owners find it more accessible to quickly rent an available property.

The average void period was shortened from 22 days across England to 18 days – a sizable reduction of 18%.

All regions in England registered shorter voids, apart from the South West, where they stayed at the same level of 20 days.

Is This Trend Set to Continue?

The supply-demand imbalance when it comes to available rental properties has been the biggest driver of increasing rental costs in the past few years. Without a focused government scheme to address this undersupply, it looks set to persist for the foreseeable future.

For investors wondering if a buy-to-let is worth it at this time, the rising rental inflation and shorter void periods are encouraging signs.

According to William Reeve:

“We don’t normally see a bump in rents during February. It’s typically a slower month where things cool off following the post-Christmas release of demand we see in January. The fact that we’re seeing a rise this month is indicative of the ongoing squeeze on the market and a lack of available stock – something that’s further evidenced by the shortening of voids across England.”

Further Reading: To learn more about the UK property market, take a look at some of our latest buy-to-let area guides covering topics such as investment property available in Rochdale and investment property in Salford.

Author

Jessica Ferris

Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.