The absorption of terahertz (THz) radiation by water molecules facilitates its application to several biomedical applications such as cancer detection. Therefore, it is critical for the THz technologies to be characterised with water content in a sample. In this paper, we analyse gelatine phantoms in the THz frequency range, with continuously varying hydration levels as they dry over time. Water molecules in close proximity to the protein molecule, termed ‘bound water’, feature properties different from the ‘free water’ molecules at larger distances. We find that a common model for predicting electromagnetic properties of phantoms and tissue samples, which assumes that only the free water varies with hydration while the bound water remains constant, does not agree well with measured results. To gain insight into this behaviour, we simultaneously measured the phantom in Raman spectroscopy, which shows a continuously varying concentration of bound water with hydration level. It follows from this investigation, that the permittivity contributions of neither the biomolecules nor water are expected to be linear with water density. This means that the often used, simple effective medium model will not be accurate for many biological tissues or phantoms.