Two and three bedroom properties have seen the greatest increase in average monthly rent and Wales has seen the biggest monthly rent increase of all the regions at 4.9%.
The monthly index from lettings agents Countrywide, one of the largest in the country, also shows that rent arrears have fallen in all regions apart from Scotland and the East of England Average monthly rent increases 4.9% in Wales, the greatest out of all regions.
The data shows that yields declined in all regions apart from the East of England where they have increased by 0.2% to 6.2% and Scotland where they increased by 0.1% to 5.8%. Yields remained the same in the South West and the Midlands at 5.7% and 6.5% respectively. The greatest yields are being achieved in Wales at 6.6%, the Midlands at 6.5% and the North at 6.4%.
Two and three bedroom properties saw the greatest increase in average monthly rent, with a 0.5% and 0.3% month on month increase to £770 per calendar month and £884 per calendar month respectively. The average monthly rent for one bedroom properties was £674 per calendar month, a decrease of 0.6% on April and for four plus bedroom properties it was £1,363 per calendar month, a decrease of 2.1% on April.
Rent arrears remained the same or fell year on year in all regions apart from Scotland and East of England. In Scotland they increased 4.6% and in East of England they increased 0.1%.
In terms of property sizes the level of rent arrears fell for all property sizes, with three and four plus bedroom properties seeing the greatest decreases at 1.2% and 1% respectively.
Wales has seen the greatest increase in average monthly rent, up 4.9% on April 2013, followed by Scotland up 2.2%, the North of England up 1% and the South West up 0.5%.
Despite some regional increases the average monthly rent in England, Scotland and Wales fell 0.2% in May, which is the first month it has fallen since January 2013, but rents are still 0.8% higher year on year.
The Midlands has seen the greatest decrease in average monthly rents, down 1.4% month on month, followed by South East and Central London, both down 1.3%. Scotland has the lowest average monthly rent at £617 per calendar month and Central London the highest at £2,340 per calendar month.
‘House prices are growing faster than average monthly rents in some parts of the country, resulting in a slight decrease in yields over the past month. Despite the decrease in yields in May, rental yields remain strong and are providing attractive returns for buy to let investors compared to other types of investment,’ said Nick Dunning, Group Commercial Director at Countrywide.
‘The fall in average monthly rents for four plus bedroom properties reflects consumers decisions to source cheaper properties to rent to try to keep living costs down, thus demand is higher for smaller rather than larger rental properties. This is particularly true for potential first time buyers who are saving for a deposit to buy their first home,’ he explained.
‘However, the summer is traditionally a busy time for the lettings market as demand for rental accommodation picks up, with many perspective tenants wanting to move in and be settled by September. Whilst in May supply for rental properties and demand was more balanced, the average monthly rents are likely to rise over the summer months as demand increases during this period,’ he added.