The English rental market experienced a significant downturn as monthly rents fell by over 12% in October, according to the Goodlord Rental Index.
- Year-on-year rent increases have slowed considerably, with October seeing the lowest annual rise in recent times.
- Void periods, indicating the time properties are vacant, have also expanded, reflecting decreased market pressure.
- Regional variations show that the South West experienced the largest drop in rents, followed by the South East and Greater London.
- Average salaries of tenants increased, offering some relief as salary growth outpaced rent rises.
The Goodlord Rental Index for October has revealed a notable cooling in the English rental market, with monthly rents experiencing a sharp decline of over 12%. This marks a shift from the previously overheated market conditions observed from July to September. The current decline brings average rents down to £1,238, compared to £1,417 the previous month.
Year-on-year figures show a narrowing of rent increases, now at an annual low with a modest 4% increment, significantly reduced from the over 7% increases reported earlier in 2024. In particular, Greater London saw a 2% rise in year-on-year rents, while the West Midlands experienced nearly a 6% increase. However, the overall month-on-month decrease of 12.6% was felt across all monitored regions.
The South West region was the most affected, with rents dropping by 24%, followed closely by the South East at 16% and Greater London at 11%. This widespread reduction follows a period of three months where average rents had exceeded £1,400. Such declines point to a broader cooling of demand in the housing market.
Void periods have extended significantly, now standing at an average of 19 days in October, an increase from 15 days in September. This 27% rise shows a return to pre-summer levels, though it’s a slight change from the 18-day average seen in October 2023. This reflects eased demand and provides a breather for tenants and landlords.
In addition to rental market dynamics, tenant salaries have shown positive growth. October saw a 1.7% rise in the average salary of tenants signing new leases, pushing the average salary from £37,350 to £37,997. Over the past year, this represents a 5.15% increase in tenant salaries, marking the second consecutive month where salary growth has outpaced rent increases.
William Reeve, CEO of Goodlord, commented on these trends, highlighting that these figures confirm earlier signs of a softening market. “October tenancies brought decreased rents and a squeezing of the year-on-year rises, while salary figures were up modestly,” Reeve stated. Such trends are viewed positively by tenants, who previously faced stretched affordability limits. Reeve also suggested that the current environment could lead to a more sustainable period for landlords and agents, who have navigated significant regulatory changes.
The English rental market’s downturn offers tenants some financial relief, while landlords adjust to evolving market conditions.
