Rents in England have hit an all-time high, rising 19 per cent in a month – as prices are pushed up by students looking to find accommodation for the new university semester.
Average amounts exceeded £1,300 per month in July, a staggering 19 per cent increase compared to June.
The Goodlord Rental Index also found that the amount of time a rental property is vacant between rentals has fallen to just nine days.
Average rent in England reached £1,367 per month per home, up 19 per cent in a month
In the fiercely competitive rental market, the average rental cost in England has risen to £1,367 per month per property.
It is the highest level ever recorded by the index and is 9.4 per cent higher than the previous record set in September last year, at £1,249.
The July average cost is a whopping 19 percent higher than the June average, with students believed to be fueling the increase.
The average month-on-month rent increase for the year to date was 1.3 percent. The rents of leases concluded in July rose by 10 percent on an annual basis.
Goodlord suggested that the volume of larger, more expensive properties rented to groups of students in July ahead of the new academic year contributed to the rapid rise in average costs.
William Reeve, from Goodlord, said: ‘This month’s numbers are quite astonishing. In July, we usually expect an increase in rents and a reduction in vacancy rates – and all indicators pointed to a particularly sweltering summer for the rental market, if not the weather.
So while the 10 percent year-on-year increase is a big shift, the sharp drop in vacancy rates is also very surprising.
Digging into the data, we see a large number of multi-occupancy student rentals confirmed in July, which has driven up average prices in key regions such as the Northeast and Southwest.
“Traditionally, rental costs continue to rise until September before cooling off in the fall, which could mean these aren’t the last records we’ll see broken before the year is out.”
July’s average rent is a whopping 19 percent higher than June’s average, with students believed to be fueling the increase
July saw significant rent increases in the East Midlands, up 21 percent, and the North East, up 25 percent.
Greater London, the South East and the West Midlands all experienced more modest increases.
The West Midlands is currently the cheapest region for renters, with Greater London the most expensive.
The Goodlord Rental Index revealed average rent increases in regions across the country
As rental costs rose, the length of time properties sat vacant between tenants went in the other direction. The number of empty periods fell by 44 percent to an average of just nine days in July.
This is down from 16 days in June, and is the lowest ever recorded by the Index. The previous record was 10 days in July 2022.
The Northeast and Southwest experienced the shortest vacancy rates, averaging only six days of vacancy.
It is a reduction of 60 percent and 45 percent respectively compared to the June vacancy figures for those regions.
The longest vacancy periods were recorded in the West Midlands at 14 days, although this was still a 22 per cent drop compared to June.
Greater London saw the smallest month-on-month change, a 21 percent reduction in vacancy, from 14 days to 11 days.
Goodlord revealed the number of days between leases by region, in June versus July
Growing student numbers pose a housing challenge
Separate research from PwC found that as students prepare for the start of the new academic year in September, the intense demand for housing combined with rising rental costs threatens to impact the student experience.
It suggested that growing numbers of students, from the UK and internationally, have led to a surge in students in certain cities.
For example, universities across Glasgow have seen around 18,500 more students since the 2019/20 academic year, and Bristol and Manchester have seen increases of 10,500 and 10,000 students respectively.
Damien Ashford, from PwC, said: ‘Many students may face limited choice regarding the mode and location of their studies, coupled with reduced access, choice of location and quality of accommodation they can afford.
“This may add to existing concerns about students’ mental health and social well-being, and more students are likely to be unable to make ends meet financially.
‘The most disadvantaged students are hit hardest, reducing access to higher education and increasing dropout rates.’
Paul Humphreys, from StudentCrowd, said: ‘A student’s accommodation experience has a major impact on their ability to thrive in college.
‘In most cases, students enjoy an excellent experience in purpose-built student accommodation – both university owned and private.
“We see that reflected in the average review score for accommodations – 4.3 out of 5 in 2023 so far. However, the industry must work together to provide affordable accommodation in all UK cities.”