Residential rents up by almost 4% in England and Wales year on year
Rents increased in England and Wales by 3.9% in the 12 months to November 2016 taking the average rent to £830 a month, the latest index data shows.
London remained the most expensive place to rent a property with rents reached a new high of £1,295 per month, according to the Your Move index. But the London market is slowing with annual growth of just 1.9% and rents were flat month on month.
On a regional basis rents increased in nine out of 10 regions and only the South West recorded a small decline in rents to an average of £656.
The South East recorded the greatest annual increase with growth 13.6% to £875 per month and the rental market in Wales saw annual rents rise by 6.2% to £584 but slightly down on the £591 recorded in October.
The North East has also seen rents rise faster than the national average increasing by 4.2% year on year to £542 although this still remains the cheapest place to rent a property in the country, slightly cheaper than Yorkshire and the Humber where rents average £564.
However, month on month several regions saw rents fall including a decline of 3.7% in the South West, a fall of 0.46% in the South East while rents were down by 0.18% in the North East, by 0.16% in the West Midlands and down by 0.53% as a whole in England and Wales.
Month on month rents increased by 4.5% in Wales, by 1.9% in the East of England, by 1.12% in the East Midlands, by 1.07% in Yorkshire and Humber, by 0.81% in the North West and by 0.39% in London.
According to Adrian Gill, director of lettings agents Your Move, the rental market is still holding strong, despite ongoing pressures elsewhere in the British economy. ‘Landlords are continuing to see strong yield levels and rents are increasing, even if growth is slower than it was previously,’ he said.
He pointed out that tenants are now in a much better financial position than earlier in the year. ‘Fewer are struggling with rent payments and this is great news for tenants and landlords alike,’ he explained.
‘There is now a great deal of stability in the rental market and this means there is a solid platform for growth in future months,’ he added.
The index also shows that gross rental yields held firm and across England and Wales the typical return was 4.7% in November, down from 5% in November 2015, but exactly the same as in the previous three months.
The North East was again home to the best yields in England and Wales with properties in this region returning an average of 5.3%, the same as October but higher than the 5% figure recorded last November.
The North West and Wales, areas with lower than average house prices, saw yields above the national average. In the North West landlords saw a return of 5.1% while in Wales the figure was 4.9%.
At the other end of the scale, London was the region which offered the smallest yields. Properties in the capital returned 3.3% on their investment this month, the same as in October, attributed mainly to the fact that, despite high rents, the large initial investment continues to limit returns.