Rental Prices Climb in February, Defying Seasonal Expectations

The latest findings from Goodlord’s Rental Index indicate an ongoing escalation in rental costs, marking a consistent year-on-year increase. February 2024 witnessed a notable 7% rise in average rental prices compared to the same period in 2023, with the average rent reaching £1,162 in England.

This February, contrary to the typical post-Christmas slowdown, saw a 1% increase from January’s £1,154, defying the usual trend where rents have historically dipped in February in four of the past six years. This year’s rise to an average of £1,162 underscores a continued pressure on the market, with tenants now facing a 7% hike in rental costs compared to February last year.

Regionally, the South West led the year-on-year increase with an impressive 11% rise in rental prices, followed closely by the North East with a 7.5% increase. The West Midlands saw the smallest increase, with rents up by 4.5% from last year.

Month-on-month data for February also highlighted significant regional variations. Both the South West and South East experienced the highest increases at 2.5%, pushing the average rent in the South East to £1,293 and £1,173 in the South West. In contrast, the West Midlands and Greater London saw a decrease in rental prices, with a 2% drop in the West Midlands and a 1% reduction in Greater London.

Rental Prices Climb in February, Defying Seasonal Expectations Residential Landlord

The report also sheds light on the demand for rental properties, as indicated by the reduction in void periods – the time properties remain unoccupied between tenancies. Across England, the average void length decreased from 22 to 18 days, a significant 18% reduction. The North East experienced the most substantial decrease in void periods, dropping by 29% from 24 days in January to just 17 days in February. The South West, however, saw void periods remain stable at 20 days.

William Reeve, CEO of Goodlord, reflected on the unusual increase in rents during February, attributing it to the persistent demand and shortage of available rental stock. “We don’t normally see a bump in rents during February…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,” Reeve commented. He also noted the consistency in year-on-year rent increases, with the market hovering around a 7% increase mark, sparking curiosity about potential shifts as the summer approaches.

This latest Rental Index from Goodlord not only highlights the resilience of the rental market but also signals the challenges faced by tenants and landlords alike in navigating the complexities of the current housing landscape in England.