Rental yields on student lets are climbing steadily across England according to a new analysis by Goodlord.
In good news for landlords, the upcoming university term – which many students hope will provide a return to normal teaching – looks set to bring the student lettings market back into long term growth.
Following an analysis of 5,000 student lets processed through the Goodlord platform between January and July, the data shows the market recorded a huge boost in the cost of rent for tenancies that began during the end of that period.
Greater London, the North East, North West, South East, South West and the West Midlands all recorded their highest average rents for tenancies commencing last month. In some regions, averages have almost doubled in recent weeks when compared to their lowest rates for 2021 so far.
The North East recorded an average rental price of £1,114 for a student let in July 2021, up from £636 for those which began in March 2020 – an increase of 75 per cent. This was also higher than the figure recorded in July 2020 for student lets in the North East, when average rents reached a high of £967.
In the North West, July saw a new annual high of £1,552 recorded, up from the region’s year to date low of £707 in March – a 120 per cent rise. Again, last month’s averages outstripped rents recorded in July 2020, which peaked at £1,535.
The South East also had a bumper month in July – with rents hitting £1,581 on average. This compares to a year-to-date low of £992, recorded in January, and is 30 per cent higher than the same time last year, when rents rose to £1,214 in July 2020.
Tom Mundy, chief operating officer of Goodlord, comments: “July was one of the busiest months we’ve seen for the lettings market in quite some time – the Goodlord platform processed more tenancies than ever before.
“Rents are rising and voids are dipping, for both student properties and the wider market. Agents are telling us that available rental stock is being snapped up incredibly quickly and some are even struggling to meet demand.
“July and August are normally peak months for students moving into rental accommodation, so it’s not a surprise to see July’s spike in the figures. We would expect to see this continue through this month before cooling off. Overall, rental prices are higher in most regions right now than they were this time last year, which reflects a market operating with more certainty and nods to the optimism from students that their next year will be spent in their university towns.”
July was also a busy month for the wider lettings market. The average cost of rent for a property in England soared by 10% last month. Prices increased from June’s average of £960.62 to a new annual high of £1,060.50. This is the highest average recorded since September 2019.
The overall average for void periods in England in July stood at 14 days. This was the lowest average recorded by the Rental Index since August 2019.
