Supply issues expected to drive rents up despite cost-of-living pressure

March 3, 2022March 3, 2022 | Marc da Silva

Rental voids fell across almost all regions of the country as February proved to be another busy month for the lettings sector.

Greater London saw a 24% reduction in the length of void periods – dropping from 17 to 13 days. And the East Midlands recorded a 25% drop – from 24 to 18 days, according to Goodlord.

The biggest change was seen in the South West, where voids reduced by a sizeable 27% during February – moving from 26 to 19 days.

The North East, North West and South East also all recorded reductions in average void periods.

The only region to see an increase in voids was the West Midlands, where a rise was observed. Numbers increased from 18 days to 22 days – a 22% increase.

Despite the supply-demand imbalance in the market, rents held steady last month and are yet to return to the price peaks seen last autumn.

Most regions saw a small drop in the average cost of rent; the England average reduced from £994 per property to £968 – a 2.6% decrease.

The biggest change came in Greater London, despite diminishing void periods. There was a 3.9% reduction in the average cost of rent in the capital, from £1,675 to £1,609.

However, there are signs that rents could rise in the near term, as salaries continue to rise.

The average salary for employees in England has increased steadily over recent months and is now £28,115 per tenant, up from £26,111 per tenant last year.

Tom Mundy, Goodlord COO, commented: “We are seeing a clear, consistent picture when it comes to the market – demand is high and stocks are low. This is driving the low void pattern we’re seeing across the majority of the country. We are, however, seeing rents behave in a slightly more stable way which is more in keeping with what we’d expect at this time of the year.

“The shifts in average salaries for tenants is something to keep an eye on – as employers respond to the Great Resignation and staff court higher pay packets, we are seeing take home pay increase. This could well begin to drive up rental prices once again as tenants max out their budgets in order to secure the best properties.”

Average cost of rent

Average void periods

Average tenant salaries