Wednesday 27 September 2023
Tenants faced high rents in South London during August
The temperature isn't the only thing soaring this summer; the South London rental market is experiencing a sizzling surge in prices. According to the latest Rental Index from Goodlord, the cost of rent across England has risen by a staggering 10% year-on-year. Even though average rents dipped slightly in August, following a record-breaking July, tenants are still grappling with high prices during the market's busiest season.
The Numbers Behind the Heat
The average rent in England experienced a marginal drop between July and August, slipping by 1.5% to an average of £1,347 per property. While it didn't surpass July's record-breaking index of £1,367, August 2023 still boasts a formidable 10% increase compared to the previous year. In fact, the average rental costs are a substantial 15% higher than the year-to-date average for 2023.
Summer typically witnesses a surge in student lets, but this year, that influx has coincided with other pressures on the rental market. The result? Prices have skyrocketed to unprecedented heights. Greater London and the South East witnessed the most significant increases in average rents, with the capital experiencing an 8% surge and the South East recording a remarkable 14% rise.
However, in the North West, a different pattern emerged, with average prices dropping by 20%. This trend mirrors last year's pattern in the region, marked by a considerable spike in rents during July, followed by a more subdued August. The North East and the South West also saw decreases in rents, with drops of 6% and 10%, respectively, after witnessing substantial increases in July.
Understanding Void Periods
Void periods, which indicate the time a property remains unoccupied between tenancies, experienced a slight uptick in August compared to the intensity of July. The average void periods rose from 9 days to 13 days. However, it's important to note that August still marked the second-lowest month for voids since July 2022.
The South West saw the most significant shift, with voids increasing from 6 days to 13. The North West followed suit, with averages jumping from 7 days to 14. Interestingly, both regions also recorded the most substantial declines in average rent costs. Conversely, Greater London and the South East, both witnessing a rise in rental costs, reported no change in average void periods.
The Bigger Picture
William Reeve, CEO of Goodlord, sheds light on the situation, stating, "There were so many records broken in July, it's not altogether surprising to see a slight dip in average rents and slightly longer void periods during August. However, when you look at the bigger picture, the market is clearly still running extremely hot."
Year-on-year averages for rental costs have seen significant increases, with the £1,300 per month barrier shattered for the second consecutive month. As September ushers in the annual peak in prices, it's likely we'll witness another month of elevated rents and brief void periods before any seasonal shift in pace occurs.
For South London homeowners contemplating renting out their properties, understanding these market dynamics is crucial. Whether you're navigating high rents or planning to enter the rental market, staying informed and adapting to market trends is the key to success in this 'red hot' environment.
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