Rents up across most of England and Wales year on year, latest index shows
Ongoing demand for more properties to rent saw rents rise year on year in nine out of 10 regions in England and Wales in August to an average of £904, the latest index shows.
Many areas see demand outstrip supply as tenant numbers rise and rents in both the East of England and the North West rose faster than any other region during August, according to the Your Move buy to let index.
Both areas have seen the average monthly rent increase by 3.2% in the last 12 months to £876 and £631 per calendar month with the South East nor far behind with a 3% rise to £882 per month.
The South West was the only region to see a price fall in the 12 months to August and the average rent in the region is now 2.7% lower than a year ago at £667 but rents in the North East are the lowest at £540 per month.
London continues to be the region with the highest average rent. In August the typical property let for £1,282 per calendar month, up 1.5% year on year but rental priced vary depending on location.
On a monthly basis, no region saw significant growth. The best performance came from both the South West and Yorkshire and The Humber, with rents up by 0.4% between July and August.
Three regions saw rents fall month on month with a decline of 0.5% in both the East of England and Wales while rents fell by 0.1% in the North East.
Yield levels remained flat in most areas of England and Wales during August. The North East was the only region to see yields fall month on month, dropping marginally from 5.2% to 5.1%.
However, landlords and property investors in the North East continue to enjoy higher returns than any other region with an average yield of 5% during August while in London the average yield was 3.2%, the lowest. However, this return has remained steady throughout 2017.
Apart from the North East, each of the nine other regions saw yields remain level between July and August and the average yield across England and Wales now stands at 4.4%, the same as the previous month. However, this is down on the 4.9% recorded in August 2016.
Richard Waind, director of Your Move, pointed out that despite rising rents, the yields achieved by landlords continue to be squeezed. ‘Following a drop off in new tenant enquiries after the Brexit vote last year and a resulting decrease in European Union migration figures, we have started to see a resurgence in tenants coming to the market in recent months,’ he said.
‘Particularly in London figures are returning to the levels that we would expect around this time of year, with August and September being the busiest months for lettings as students, graduates and families working in the education sector look for new properties,’ he explained.
‘This recovery in tenant enquiries, combined with continued subdued supply of new listings in the wake of recent tax changes affecting landlords, has been a key reason for price increases in the last year and could push rents up further in the coming months,’ he added.