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Tenant income tumbles but so far no damage to rental market

The latest survey from PropTech platform Goodlord suggests the lettings landscape is relatively stable entering 2021 - but with the prospect of a strong market ahead, despite the winter lockdown.

Rent levels across the regions monitored by Goodlord held firm in December, with most areas recording very small shifts. 

The North East, South East and the Midlands all recorded negligible shifts of under one per cent in either direction; similarly, London saw a small dip of just 1.7 per cent. This was followed by the North West, where prices saw a small decline of 2.2 per cent.

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The biggest shift was seen in the East Midlands, which recorded a 7.0 per cent fall; the South West, on the other hand, saw the biggest increase in the average cost of rent, ticking up 1.9 per cent.

With December a traditional slow month for the industry, the steadiness of rental prices is a strong indicator of ongoing market resilience according to Goodlord. 

The average cost of rent in the UK overall is now £895 pcm. 

Void periods improved during December, buoyed up by latent demand following November’s lockdown - that was the second of the three in England so far. 

The North East and South East saw numbers hold steady month on month. All other regions -  Greater London, the East Midlands, the North West, South West, and the West Midlands - saw a decrease in the average void period. 

The biggest change came in the East Midlands, where voids dropped from 32 to just 20 days. 

Overall, the average void period across the country is now 21 days, down from 25 days on average in November. 

One area which is starting to see real movement, however, is the average income of UK tenants. With restrictions continuing and unemployment rising, the impact on take home pay is now being felt. 

Between June and December 2020, the average salary of a British renter dropped from £24,613 to £23,462 - a decrease of 4.6 per cent. 

Salaries in Greater London saw the biggest shift across the last six months, decreasing from an average of £38,656 per tenant in June to £34,322 by December. 

Other regions have seen less dramatic changes, but all areas have seen a decline in average incomes with the exception of the South West. This may in part be due to less severe restrictions on business across the South West during the latter half of the year. 

 

 

Tom Mundy, Goodlord’s chief operating officer, says: “The market numbers for December demonstrate how resilient the lettings sector is. The cost of rent and length of void periods held firm in what tends to be a slow patch for agents, highlighting the ongoing demand for rental properties across the UK. 

“We are however starting to see clear signs of the pressure on wages, with average salaries now starting to slip. This is something most agents and landlords have been preparing for. And whilst it’s undoubtedly set to shift the focus of the market, we don’t predict that it will dampen demand for lettings overall.

“In the main, these figures provide a strong indication that the coming months will be busy for the sector, especially seeing as house moves will continue to be permitted under the latest lockdown measures.”

  • George Dawes

    Like the lockdowns this is just kicking the can down the road until an almighty crash happens

    Google 'the great reset' , makes the last financial cash look like a flea's fart in comparison

    Things are going to go pear shaped , very much so .....

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    meanwhile... on the other side of town... "Citizens Advice claims to have one private rental case every two minutes"

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    Is that all?????

     
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    David C

    I agree. If that's 30 per hour by 168 hours by 52 weeks then it's only around 1/4 million - so under 10% of all tenants.

    However, if it's 30 per hour for 35 hours per week then it's only around 50,000 - so around 2 % of all tenants - much as expected even in good times.

    Anyway it's probably just the same few cases coming often from the same few idiots - like many of the posts on here!

     
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