Average residential rents in England and Wales now stands at £753 per month, despite a seasonal dip, and have increased by 1.6% in the last 12 months, the latest buy to let index shows.
Landlords have seen a record 8.9% total return over last 12 months, amounting to £14,592, the data from the LSL Property Services Index also shows.
Overall rents have risen at twice the annual rate of weekly earnings which have risen by just 0.8% on an annual basis but tenant finances have also improved as the proportion of late rent has dropped to 6.6%.
November also witnessed annual growth in lettings activity. The number of new tenancies agreed across England and Wales increased by 1.5% compared to November 2012. This was despite a slowdown on a monthly basis, with 6.3% fewer new lettings than in October.
‘Economic reality now resembles the most optimistic dreams of last year. But for so many households, the dream of home ownership is still relegated to the imagination,’ said David Newnes, director of LSL Property Services, owners of estate agents Reeds Rains and Your Move.
‘It’s not just wages. Savings rates have been swamped by inflation for half a decade so building up even a 5% deposit is a real struggle for first time buyers. Help to Buy is having a perceptible impact, with thousands of first time buyers benefiting already. Yet millions of new households have joined the queue at the bottom of the housing ladder and private renting is the only tenure to have taken up much slack,’ he explained.
He pointed out that eight out of 10 regions saw rents fall on a monthly basis between October and November, in line with a monthly fall across England and Wales as a whole.
The sharpest monthly drop was in the West Midlands, with rents down 2.6% since October. This was followed by a fall of 1.8% in the South East and a 1.3% monthly decrease in the East of England. However, the South West experienced rent increases of 1.1% between October and November, while rents in Wales also rose slightly on a monthly basis, up by 0.2%.
On an annual basis, London saw the steepest rent rises, some 4.4% higher than in November 2012. This was followed by a 3.4% annual increase in the South West, while rents in the South East are 3.2% higher than 12 months ago.
Meanwhile, rents in the East of England have fallen by 5.5% or £42 over the last year. This was followed by a 2.8% annual drop in the West Midlands, while rents in both the North East and Yorkshire and the Humber are 2% lower than November 2012.
Newnes said that as the economic recovery spreads throughout the UK the property market is the leading edge of that wave. ‘As the home purchase situation heats up, the effect on the rental market is even less uniform with rises accelerating in some areas and slowing in others. Across...