May Rents Reach 7-Month High: Summer Rental Market Sees Price Surge

Jun 3, 2024

by Internet

Market Insight
Rising Rent
Summer Rental Market
Goodlord Rental Index
Vacancy Rates

Abstract : May saw a significant increase in rent prices, reflecting seasonal market changes and growing demand. Despite the upward pressure on rents, increased vacancy periods and slight income growth provide renters with some relief.

According to the latest Goodlord Rental Index report, average rents in May reached a seven-month high of £1,183, marking a 6.4% year-on-year increase. Within a month, average rents rose by 1.4%. Goodlord CEO William Reeve noted that this data might signal the beginning of a summer rent surge, as summer is typically the busiest season for the rental market and the time when rents peak annually.

Reeve highlighted that the year-on-year rent increase for 2024 has remained relatively stable, ranging between 6% and 7%. Last summer, average rents surpassed £1,350 per month for the first time. If this trend continues, average rents might exceed £1,400 in a few months. Although rent increases have outpaced inflation and income growth, vacancy rate data suggest that market pressure may be easing.

In detail, the West Midlands experienced the largest month-on-month rent increase at 4%, followed by the North West at 2%. In May, the average vacancy period in England extended to 21 days, up from 19 days in April. The average vacancy rate, which measures the time a property remains vacant between tenancies, was 11% higher than the same time last year, indicating a shift towards a more balanced supply-demand situation. In May of the previous year, the average vacancy period was 19 days.

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Greater London and the East Midlands saw the most significant changes in vacancy periods in May, with both regions experiencing a 20% increase in vacancy days. Meanwhile, the average annual salary of new tenants signing leases in May was £37,095, a 0.8% increase from April's £36,810. The lowest tenant wages were found in the North East, averaging £30,718, while Greater London had the highest, averaging £49,883. The average age of UK renters in May was 33 years.

Overall, despite the rise in rents ahead of the summer, market data indicates a softening of the supply-demand imbalance. The extension of vacancy periods provides some breathing room for renters. However, ongoing rent increases still pose challenges for many renters, particularly when income growth lags behind rent hikes. These market changes reflect economic fluctuations and the persistent growth in housing demand.

In the coming months, rents may continue to rise, especially during the summer rental peak. However, with longer vacancy periods and easing market pressures, renters might find more options and bargaining power. Understanding market trends and data shifts will help renters make more informed decisions when searching for housing.