The level of rental revenues lost by landlords due to void periods increased by 19% across England over the last year and as high as 65% across some regions, latest research from Benham and Reeves reveals.
The London-based lettings and estate agent’s research shows that void periods are on the up, increasing from an average of 22 days to 24 days over the last year.
At the same time, the average monthly rent has also increased, now sitting 8.9% higher than this time last year at £1,375.
As a result, the cost incurred by landlords across England as a result of the average void period now stands at £1,085 – a 19% jump in the last year alone.
NORTH WEST BURDEN
Across the North West, the length of the average void period has increased by 10 days, now averaging 30 days, whilst rental values have increased by 9.8% or £79 per month.
As a result, the average loss of rental income incurred due to void periods now averages £876, a huge 65% increase versus this time last year.
Landlords across London have seen the second largest annual increase in the level of rental income lost due to void periods at 36% and, with this loss now sitting at an average of £1,611, the capital is also home to the highest cost of a void period of all regions of England.
The South West has seen the third largest increase in the cost of a void period at 28% and is also home to the third largest overall cost at £920, behind the South East at £981.
INEVITABLE REALITY
Marc von Grundherr, Director of Benham and Reeves, says: “Void periods have long been a thorn in the side of the nation’s landlords but it’s an inevitable reality when operating within the private rental sector.
“However, there’s been a considerable increase in both the time and rental income lost to void periods over the last year and this is a worrying trend that could well continue with the Renters’ Rights Bill on the horizon.”
LONGER VOID PERIODS
He adds: “The switch to periodic tenancies over fixed-term contracts will enable tenants to jump ship with just two months’ notice, putting landlords back at square one with respect to finding a tenant and once again enduring the income lost due to a void period.
“So not only will they face longer void periods, they are also likely to become more frequent, which will further reduce the profit margins of the average buy-to-let investor at a time when we should be encouraging investment into the sector.”
