July 2021 has been and gone as we steer towards the end of the year, and what a month it was for the rental market! In what has already been an extremely positive year for UK property, July only seemed to get better as the market continues to prove its resilience in these unprecedented times.
With that in mind, we thought we’d breakdown some of the highlights of this month and look into what this means for the rental market moving forward throughout the remainder of the year!
The demand from tenants for rental properties reached a five year high towards the end of July, according to research from Paragon Bank. The report found that around 39% of landlords have seen an increase in tenant demand over the past three months, and 18.2% stating that their tenant demand had grown significantly.
This was up by around 8% from the quarter before and 25% on the year prior, further showcasing the market’s excellent performance in 2021 so far. When breaking this down on a regional level, Yorkshire and the Humber experienced the biggest increase, with 65% of landlords in the area reporting an increase in demand, closely followed by Wales and The South West with 64% and 63% respectively.
Void periods down
In their July Rental Index report, Goodlord found that average void periods in every single region in England dropped. This revelation is no doubt intertwined to the aforementioned increase in tenant demand, with rental properties across the country continuing to be highly sought after.
Again, looking on a regional basis, the biggest change in void periods was seen in the North East, in which void periods dropped from 13 days in June to just 7 days in July, an incredible drop of 46%. Regions such as the West Midlands, Greater London, the North West and South East all also experienced drops in void periods.
Once again, in Goodlord’s Rental Index report they also found that rents across the country were soaring to the highest levels seen over the last two years. During July, average rents in England increased by an impressive 10% – an increase of just under £100. This increase shows something of a return to stability in the rental market, with July and August typical seeing an increase in average rents before the pandemic hit.
The South West saw the largest increase throughout England, with rents rising by an impressive 24% when compared to June. This was closely followed by the North East (19%), the North West (11.5%) and the South East (7%).
Rent arrears low
If an increase in tenant demand, lower void periods and rising rents weren’t enough to lift landlord’s spirits throughout the course of the month, the average number of tenants in arrears reached its lowest level in over 10 years!
New research from Paragon Bank revealed that landlords had an average of 1.3 tenants with outstanding rent payment, down from 1.6 tenants per landlord in Q1 2021. This decrease is the lowest number since Q1 2011, offering a good indication that the UK economy is bouncing back in an impressive fashion.
In addition to all of these positive findings in the rental market, July 2021 also saw the country return to the closest form of normality since before the pandemic as the majority of lockdown restrictions were lifted from July 19. The long awaited ‘Freedom Day’ has no doubt resulted in a massively positive mood across the nation, and in turn a huge boost to the economy.
With this economic resurgence expected to continue throughout 2021 and beyond, you can be sure that the rental market will fare just as well, if not better, as people re-assess their living conditions following 18 months of on-again/off-again isolating.
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