The latest buy to let index from LSL Property Services, which owns the UK’s largest lettings agent network, also shows that rents across the east and West are just £1 behind the all time record, set in October 2012, and in the 12 months since August 2012, average rents have risen by 1.3%.
The report also reveal that tenants’ finances are healthier, with total amount of late rent down by £10 million since July, and the pace of new lettings accelerated in August, as the number of new tenancies across England and Wales increased by 8.8% compared to July. On an annual basis, there were 13.7% more new tenants in August than in August 2012.
Overall some eight out of 10 regions saw higher rents in August. Rents in the South East rose the fastest of all, up 2%, while Welsh rents were 1% higher. The third fastest monthly rise was in the North West, with rents rising 0.9% compared to July. By contrast, rents in the North East fell by 0.8% in August, while the average rent in the East Midlands was 0.3% cheaper than the previous month.
On an annual basis, five regions out of 10 have seen rents rise in the last 12 months. By a significant margin, London saw the fastest annual increases, with rents up 4.8% in the last year. This was followed by Wales, where rents are 2.3% higher than 12 months ago, while the East Midlands saw the third largest annual rise, with rents up 0.9% since August 2012.
By sharp contrast rents in Yorkshire and the Humber are 1.6% lower than in August 2012, followed closely by a 1.5% annual fall in the North West, while rents in August were 1% lower than a year ago in the West Midlands.
David Newnes, director of LSL Property Services, said that better availability of finance has allowed some households to leave the rental market. ‘Rents certainly felt the short term impact of that. But releasing a blast of that pent up pressure to buy a home is unlikely to change the long term trend to renting. Although government schemes are helping, buying a first home is still extremely hard on the back of low salary growth. As hundreds of thousands of new households look for homes, it’s increasingly private renting that’s absorbed the pressure. Autumn brings the seasonal peak for the rental market, in part due to the spike caused by student renters, and the sheer volume of lettings activity shows demand this year is as strong as ever,’ he explained.
Gross yields on a typical rental property remained steady at 5.3% in August. However, taking into account void periods between tenants and capital accumulation, total annual...
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