Rents rise for first time in every single region
For the first time on record, asking price rents have risen in all regions of England and Wales.
The rise was recorded in the latest buy-to-let index published this morning by LSL Property Services, parent company of national chains Your Move and Reeds Rains. The research is based on 18,000 properties on their books.
In September, the average rent in England and Wales rose by 0.7% to £718 per month, surpassing the previous record high of £713 in August.
With annual rental inflation at 4.3%, the average rent is £29 pcm higher than September 2010. The average yield in September rose from 5.2% to 5.3%.
On a monthly basis, rents rose in all regions of England and Wales for the first time on record. As a result, rents hit record highs in six regions – London, the South-East, Yorkshire and the Humber, the East of England, Wales and the East Midlands.
Rents increased the fastest in the South-East and the East Midlands, where they rose by 1.8% and 1.1% respectively compared to August, while the smallest increases were in the West Midlands and the North-East, where rents rose by 0.2% and 0.3%.
However, over the course of the last year, London’s rents have risen at a faster rate than any other region, increasing by 5.8%. The next biggest annual increases were in the South-West and the West Midlands, where rents rose 5.4% and 5.1% respectively.
David Brown, commercial director of LSL, said: “It’s not just a regional phenomenon, localised to London and the South-East – rents are rising across the board.
“In areas of the highest demand, such as the capital, competition is driving up rents at a faster rate than elsewhere – but no region has been immune to the growing demand for rental homes from frustrated buyers.
“In many cases, buying a home is now cheaper on a monthly basis – provided renters can get past the stumbling block of the substantial deposit requirements. For the majority, saving a £25,000 deposit is a herculean task.
“As things stand, we won’t see competition among prospective tenants diminish without a substantial expansion in the supply of rental properties available on the market.”
But while rents are on the rise, total annual returns on a rental property dropped back in September after property prices fell annually.
The average total annual return in September was 1.8%, the equivalent of £3,005 – calculated by £7,661 in rent, with a capital loss of £4,666.
The LSL index also finds that tenant arrears improved markedly, following August’s seasonal increase, dropping to their lowest level since April 2010. Just 8.6% of all UK rent was unpaid or late by the end of September – down from the 10.7% of rent unpaid or late in August.
Unpaid rent totalled £243m across the UK in September, down from the £300m unpaid in the previous month.