Rents dip, but are still up on last year

by Sarah Ashcroft

Rents may have dipped a little, but there are no signs of landlords struggling to sign new tenancy agreements. The latest Buy-to-Let Index from LSL Property Services shows the average rent in England and Wales fell by 0.4 per cent to £717 per month in November.

This was down on the £720 per month in October and represents this first monthly fall since January of this year. The good news for landlords is that rents are still up by 3.5 per cent, or £25, on last year.

London, Wales, Yorkshire and the Humber and the West Midlands all saw rents increase over the month, bucking the national trend. The fastest rising rents on an annual basis were in London and the south-east, where rents rose by 4.2 per cent.

"Following their relentless march upward throughout the year, rent rises have taken a pause for breath," said David Newnes, director of LSL Property Services.

"Landlords are looking to avoid having properties vacant over the Christmas period, and can be less aggressive with pricing as tenant activity slows in the run up to the New Year.

"But across the country, the limited supply of rental accommodation means there will still be strong upward pressure on rents in the early part of 2012."

Indeed, a recent report from the Association of Residential Letting Agents highlights the gap between tenant demand the supply of private rental properties.

Meanwhile, the Residential Lettings Survey found 15 per cent more chartered surveyors reported rental yields rose rather than fell in the three months to October. Compiled by the Royal Institution of Chartered Surveyors, the survey showed the seventh consecutive quarter of rising yields, which has been put down to tenant demand outstripping property supply.

Mr Newnes went on to explain that arrears cases are below historic levels as many current renters are the type of people who would have in the past been able to buy a property. These tenants are generally very credit-worthy, he said.

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Published on: December 21, 2011

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