Rents remained at exorbitant levels throughout August
Rising Rents and Longer Void Periods in England's Rental Market
In the ever-evolving world of property, the rental market in England has seen some notable changes in 2024. According to recent research, rents have risen significantly across most regions, with London leading the charge.
Trends for 2024
The sharp rise in rents is particularly evident in London, where they are projected to increase by 5.5% in 2024 alone and around 19% over 2024-2028. This trend reflects a high-pressure market driven by limited housing supply and high demand.
The UK average rent growth has accelerated since 2021, with a decade-high annual percentage rent rise recorded in August 2024. After rapid increases, the rate of rent growth appears to be slowing down in 2025, but rents remain at a record high and still outpace both inflation and wage growth.
Affected areas
London remains the most affected area, with the highest rents and fastest increases, despite some recent slight price moderation. Other areas, particularly in the North West, like Bolton, Wigan, and Blackburn, have seen rapid rent increases of 29% to 31% over three years, indicating strong pressure in these regions as well.
The North East is the cheapest region in England but has also seen rents rise just over £700/month, with modest growth. Rents have generally increased across most parts of England, except for some regions like the East Midlands, which saw a small decrease recently but overall still higher than the previous year.
Potential impacts
The sharp rise in rents is causing affordability pressures, especially for low-income renters, as rents are outpacing wages and inflation. Tenants are paying roughly £84 more monthly than the previous year on average in the UK. The increase in housing stress is pushing more tenants to struggle with monthly costs, potentially exacerbating housing insecurity and limiting access to affordable options.
The supply-demand imbalance in the rental market is a key driver, with limited available rental homes pushing rents up. Policy experts and housing advocates stress the need to increase the stock of rental homes in both social and private sectors to alleviate pressures on renters and curb rapid rent growth.
Void Periods
In an interesting development, void periods in August 2024 were longer than those in August 2023 in all regions except for Greater London. The majority of regions in England, excluding Greater London, experienced longer void periods between lets in August 2024 compared to July 2024. However, the research did not provide specific data on the length of void periods in Greater London for July 2024 or any explanation for the increase in void periods in August 2024.
The average length of void periods in August 2024 was 15 days, slightly higher than the 13 days recorded in August 2023. The length of void periods in August 2024 increased by 36%, from 11 days in July to 15 days. The research did not specify the source from which the data on void periods was collected.
Salaries and Rent
Tenants signing new housing contracts in August 2024 experienced a reduction in salaries, with an average annual income of £36,719, down from £38,086 in July 2024. Despite this decrease, the average rent for a property in England in August 2024 was £1,438, slightly lower than the £1,470 recorded in July 2024. It's worth noting that the research did not indicate any correlation between the length of void periods and the average rent prices in the regions.
In conclusion, 2024 sees a continued sharp rise in rents across England, especially in London and parts of the North West, driven by supply constraints and market dynamics, with significant affordability challenges for renters likely to persist. The increase in void periods in August 2024 is a new development that requires further investigation to understand its causes and implications for the rental market.
- In addressing affordability challenges in the housing market, personal finance experts stress the importance of investing in real estate, considering the continued rise in rents and record high average rent growth across England, outpacing both inflation and wage growth.
- With rising void periods observed in most regions of England in August 2024, except for Greater London, sustainability in housing finance becomes crucial to minimizing vacancy in the rental market.
- As urban areas like London and parts of the North West experience rapid increases in rent, those seeking housing-market stability may find opportunities in investing in properties located in less expensive regions, like the North East, to balance personal-finance portfolios.
