Throughout May, the average void period dropped considerably for buy-to-let landlords in England. Demand and tenancy renewals have been surging across the rental market.
Data from the Goodlord Rental Index reveals void periods diminished in England as the lettings market gathered steam. The sector had a strong start to 2021. And with rents and tenant income holding steady, the rental market is expected to have a particularly strong performance throughout the coming months.
Toby Burgess-Smith, data analyst at Goodlord, says: “Our latest Rental Index, which analyses over 20,000 English tenancies each month, shows that the rental market roared back to life in May after a steady start to 2021, with void periods diminishing across the country.
“Despite the sales market taking centre stage following the stamp duty-induced frenzy, the increasingly strong performance for lettings is set to dominate the narrative this summer. Across the country, voids are tumbling and rents continue to be more resilient than predicted.”
Void periods narrow
In seven of the eight regions across England, void periods have dropped during the month of May. The average void period in England fell by a considerable 15% overall.
The buoyancy in the lettings market could be attributed to renewals and new tenancies being processed 12 months on from the surge in activity seen between May and June 2020. Because of this, many buy-to-let landlords are reaping the benefits of shorter void periods.
Individual buy-to-let landlords’ experience will differ vastly with void periods, most of which is down to location. For example, in areas of exceptionally high demand, void periods can be minimal. Currently leading the way, the West Midlands saw the largest shift in voids, decreasing from 27 days to only 18 days. This is an impressive 33% reduction from April to May.
Rents and tenant income hold steady
Rental prices are being more resilient than expected. Overall, the average rent across England shifted only slightly from £920 to £919 between April and May.
In recent months, sustained demand is keeping rent prices strong, especially in certain regions. The north-west, north-east and south-west all recorded modest rises in rent. While some regions saw prices dip, there was no fall greater than 4% during the month of May.
At the same time, the trajectory of renters’ income is providing additional cause for optimism. During the past six months, the average income for tenants in England increased by 8.2%. Tenant income dipped at the end of 2020 and at the beginning of 2021. However, incomes have built back steadily as the economy reopened.
Demand remains strong
In recent months, demand has remained strong among renters. The strong desire to move spurred by the COVID-19 pandemic has been felt across the UK rental market.
Recently, demand has been building across city centres in particular. With rental demand continuing at such strong levels, this further illustrates the importance of the private rented sector and the need for more high-quality rental properties moving forward.
Tom Mundy, chief operating officer of Goodlord, comments: “This time of year is always a busy period but the combination of increased consumer confidence, pent up demand, and what looks like a more normal year ahead for student housing, is on track to deliver a hugely successful season for the lettings market.
“Agents and landlords should make sure they’re prepared for this demand and ready to capitalise on it.”