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The North East leads the way on rental growth

Newcastle

The North East of England has seen the steepest rental growth across the UK, with an annual increase of 8.5% in January 2025, Goodlord’s Rental Index has revealed.

Despite this surge the region is still the cheapest for tenants, with an average rent price of just £911 per month.

The area also saw a monthly increase of 5% month-on-month, suggesting a number of renters are looking for properties in the region in the winter months.

Across England as a whole, in January average rental growth stood at 4.6%, following an increase of 2% from December.

This brought the average to £1,207 per property, up from £1,154 a year ago.

William Reeve, chief executive Goodlord, said: “There’s a lot to analyse in this month’s rental index.

“On the face of it, you have another month of rising rents and a rebound in pace of year-on-year increases.

“But when you dig a little deeper you can see that the void periods are at their highest since 2021 and confirmed rents are meaningfully undercutting advertised prices.

“It’s a picture of a market that continues to be buffeted by supply and demand issues, but that could be teetering its way towards stabilising. We are definitely seeing a softening in the market.

“Whilst we predict that confirmed rental prices will continue to rise this year, particularly over the summer, wider indices imply it’s unlikely 2025 will bring the major rise in year-on-year figures we saw last year.”

The slowest area when it comes to rental growth is the East Midlands, where they increased by 1.3% annually to 1.3%. They also saw below average increases in the West Midlands (3.2%) and Greater London (3.9%).

In London it now costs £2,044 on average to rent a property, followed by the South East (£1,320) and the South West (£1,219).

Voids hit highs not seen since 2021

Despite the increase in rents, voids lengthened in January – going from 21 days in December to 24 days in January. This points to a softening of demand in the market.

Voids are typically at their longest in January, when the market is quiet. However, this is the longest average void period recorded by the Index since April 2021, making it the highest period for voids in almost four years.

The biggest increase in voids was recorded in the West Midlands, where averages lengthened from 18 days to 23 – a rise of 28%.

The only region to not record a rise in voids was the South East, which held steady at 22 days. Conversely, this was also the only region to record a reduction in average rents.

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