With rents at a record high of £691 per month, LSL said landlords now face losing £702 in rent through voids in the next 12 months – 12% less than a year ago when the average was £799 lost in void periods and the average rent was £668 per month.
Taking this into account, the company said landlords would have an average annual rental income of £7,594 next year.
David Brown, commercial director of LSL Property Services, said: “Void periods are a nightmare scenario for landlords. Whilst their property remains vacant, landlords aren’t collecting the rent they need to pay their mortgage each month.
“Tighter lending criteria have kept thousands of first-timers off the property ladder, and most are staying in their current rental accommodation for longer. On top of this, tenant demand has rocketed up in the past twelve months. Frustrated first-time buyers have swelled the rental population, while the supply of properties has been kept in check by difficult mortgage finance conditions for landlords.”
LSL also surveyed their landlords and revealed that just 18% witnessed void periods of a month or more last year.
Nearly six in 10 landlords saw their properties remain empty for less than two weeks in total, costing an average of £319 and only 7% of those polled stated they had void periods in excess of ten weeks, a figure which also includes landlords who were refurbishing their properties.
Brown added: “It is a minority of landlords with severe void periods that are pushing up the national average. The vast majority are seeing their properties stay vacant for less than two weeks per year.
“However, properties don’t just rent themselves out. Investors need to do their homework to ensure the property has a strong rental history and is in the correct condition to appeal to tenants to help limit void periods and achieve a strong rental income. With the right research before purchase, and the right letting agent, void periods can be minimised.”
The LSL research also showed that nine in 10 landlords (88%) expect void periods to be lower than four weeks in the next 12 months, with just 3% anticipating their properties will be vacant for 10 weeks or longer.
“Void periods have been declining for landlords, and will continue to do so,” said Brown. “With the recent cuts to the social housing budget, the private rental sector will have an even bigger stream of demand over the next few years.
“We anticipate the average void period will fall by another two days over the coming year, making property investment an even more attractive opportunity to professional investors.”