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Double-digit drop in rental costs recorded in October

Double-digit drop in rental costs recorded in October
Christina Hoghton
Written By:
Christina Hoghton
Posted:
02/11/2023
Updated:
02/11/2023

The heat has been taken out the rental market for now, with average rents falling by over £100 a month – the first drop in months.

Average rental costs in England dropped 11% during October, according to Goodlord, while void periods have risen too.

The lettings platform published its October Rental Index, which reveals a cooler market following the red hot summer in the private rented sector.

Just weeks ago, average rents hit record high levels, according to Rightmove.

Goodlord’s latest figures show rental costs have fallen to their lowest level since June, the first drop recorded by the Index in four months.

The double-digit monthly drop takes the average cost of a property to let in England to £1,111, down from £1,249 in September.

Southern slide

All seven of the regions in England monitored by Goodlord saw a reduction in prices last month.

But the South of England recorded the biggest falls.

The South West saw the largest change, with a 20% reduction in rental costs, following a surge in the summer. The region saw average rents fall from £1,422 in September to £1,126 in October.

The South East also saw a significant fall in rents, with average monthly costs dropping 15% from £1,420 to £1,194.

Despite the monthly dip, rental prices are still 10% higher on average than in 2021.

Rising voids

Average void periods have ticked up from 15 days to 18 days a rise of 20%, with increases recorded in six out of seven regions.

Voids in the North East doubled last month to 18 days from nine in September, while the South East saw average void periods jump from 13 days to 19 days.

The West Midlands was the only region to see a fall, with a drop in voids from 23 days to 19 days.

Despite the rise, voids are still 5% lower year-on-year, compared to 2021 figures.

Tom Mundy, COO at Goodlord, said: “The market has been red hot for several months and we’ve had a consistent trend of rising prices and ever lower voids.

“As we head towards winter, we would expect to see a cooling of activity and so it’s no surprise that the streak of ever-rising prices is beginning to dissipate. However, it’s vital to remember that, in year-on-year terms, prices are much higher than in 2021 and voids are lower.

“In this context, it’s clear that the market remains very busy and pressure on available stock will continue whatever the weather.”

The Index also revealed that the average annual income of tenants rose 2% during October, with tenant salaries increasing from £29,933 to £30,717 per person.