They increased by 1.4% last month to an average of £866 per calendar month and yields remained strong in July with the average yield 6.1%.
Four plus bedroom properties saw the greatest increase in average monthly rents in July, with a 3.8% month on month increase to £1,471 per calendar month, despite falling 5.5% year on year.
Two bedroom properties saw an increase of 1% to £787 per calendar month, followed by three bedroom properties up 0.9% to £898 per calendar month and one bedroom properties up 0.8% to £689. All sized properties saw a year on year increase in average monthly rents apart from four plus bedroom properties.
The East of England saw the greatest increase in average monthly rents up 5.2% month on month, followed by Wales up 5% and the South East up 4.3%. Despite some regional increases the average monthly rent fell in central and greater London and Scotland, with central London seeing the greatest decrease down 2.8%. Scotland has the lowest average monthly rent at £636 per calendar month and central London the highest at £2,414 per calendar month.
Yields remained the same in all regions in July when compared to June, with the greatest yields being achieved in Wales at 6.6%, the Midlands at 6.5% and the North at 6.4%.
Rent arrears fell year on year in all regions apart from Scotland and central London. Average monthly rents are up 6.2% year on year in Scotland but arrears are also up 4.1%. In Central London rent arrears increased 0.2%.
In terms of property sizes the level of rent arrears fell for all sized properties, with three and four plus bedroom properties seeing the greatest decreases at 1.2% and 1% respectively but this would be fair as average monthly rents for these properties are higher.
‘The index reveals that the cost of renting continues to be higher in relation to the cost of monthly mortgage payments, with the average monthly rent now £866 per calendar month,’ said Nick Dunning, group commercial director at Countrywide.
He pointed out that according to recent data from the Council of Mortgage Lenders, lending to buy to let landlords is now at its highest level for nearly five years. ‘However, despite more competitive buy to let mortgages encouraging investors to expand their lettings portfolios and increase the supply of rental accommodation on the market, we have on average four to five tenants for every rental property we are marketing,’ explained Dunning.
‘Rental values are being underpinned by the increasing number of people living in the private rented sector and rents are likely to continue rising unless supply and demand becomes more aligned,’ he added.
