Tag Archives: voids

Rents begin to cool down – but voids start to rise Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property News

It wasn’t just the weather that cooled down in November as research reveals that rent prices across England also dropped – but voids began to rise.

That’s according to Goodlord who point out that while winter is traditionally a quieter time for the lettings sector, rent prices remain significantly up year on year.

The firm says that rents have now dipped in every region – with the average rent falling by 2%: going from £1,111 in October to £1,087 in November.

The biggest change was seen in the North West, where a 5% reduction in the cost of rent was recorded and the average price dropped from £903 to £858 per month.

The smallest shift was recorded in the South East, where rents fell by less than 1% – reducing from £1,194 to £1,187.

Rental costs are now at their lowest since June 2022

Goodlord says that their Index reveals rental costs are now at their lowest since June 2022 and there is a four-year trend of prices falling when the thermometer begins to drop.

However, rental prices are still up by 11% compared to 2021 averages.

Worryingly for landlords, voids rose in six out of the seven regions monitored with the average void period being 20 days in November, up from 18 days in October.

This means voids are now at their highest level since January of this year.

The South West saw the biggest change with voids rising from 17 days to 23 days, while landlords in the South East were the only ones not to see a rise in voids.

Tenant salaries broke a rental index record

The figures also show that during a month when rental prices were cooling, tenant salaries broke a rental index record – to hit the highest average ever recorded.

The average pay of a renter in England was £31,105 in November, up from £30,717 in October – a 1.3% rise.

This means average salaries are now 12.5% higher when compared to 2021 averages.

‘Higher rental prices across the board’

Tom Mundy, the COO of Goodlord, said: “Whilst we are contending with higher rental prices across the board and serious, ongoing pressures on rental stock, we are continuing to see the annual fluctuations we’d expect at this time of year.

“Things do tend to cool down as we head towards Christmas, with people delaying moving house until the spring, and we can see that reflected in the November figures.

“This is likely to mean an even busier than normal start to 2023 for agents and landlords – meaning that extra preparations to help cope with the coming demand may be needed.”

Landlords pay up to 7.7% more for BTLs in high demand areas Buy to Let News, Landlord News, Latest Articles, Property Investment News

Landlords looking to reduce void periods by investing in a buy-to-let within an area of high rental demand will pay an average of 6.2% more for the pleasure, research reveals.

The latest market analysis by mortgage experts, Revolution Brokers, looked at the average price for a buy-to-let investment in England and how this differs between areas with, and without, a high level of rental demand.

The figures show that investing in a high rental demand area will set you back £396,349, on average, across England.

This is a 6.2% premium compared to areas of lower rental demand, equating to an additional £23,000 on a landlord’s initial investment.

Reduce the potential of a void period between tenancies

Landlords can expect to pay the most in the South West to reduce the potential of a void period between tenancies.

At £345,908, the cost of securing a BTL property in a high rental demand area is 7.7% more compared to those in areas with lower levels of rental demand.

The East of England and North West are also home to some of the highest property price premiums for a high rental demand investment at 7.3%, followed by the South East (6.2%) and London (5.8%).

Even in Yorkshire and the Humber where this premium is at its lowest, it will still cost the average landlord 3.5% more to secure an investment property within an area of high rental demand.

‘Investing in a buy-to-let’

Almas Uddin, the founding director of Revolution Brokers, said: “When investing in a buy-to-let, the initial cost of your investment is often one of the most influential factors in the decision-making process.

“Not only do you have to be able to fund the purchase itself, but the sum spent upfront has a direct impact on the yield you will be able to return.”

He added: “However, the secondary factor is the rent you are able to generate and the consistency at which you are able to secure it.

“In high demand rental areas, not only will you be able to justify a higher rate of rent, but you will also benefit from a far lower level of void periods.”

‘Minimising void periods is an incredibly important part’

Mr Uddin continued: “Minimising void periods is an incredibly important part of maximising your investment as you can have the best yield in the world, but if you can’t fill the property with a paying tenant it doesn’t count for much.

“So, when looking to invest, landlords should always do so with a long-term view of a property, not just how much it costs, but what they can expect as a return and how easily can they rent it in the first place.”

He added: “With this in mind, paying a premium to secure a home in a high rental demand area may come at an initially higher cost, but it can pay dividends further down the line.”

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