Average rents in England and Wales were stagnant in March, up just 0.2% to £800 per month and up 4.6% year on year, according to the latest index.
But there is considerable regional variation with the Your Move buy to let index showing that the biggest annual rise in rents has been in the East of England with growth of 7.4% in a year to £883, the highest outside of London.
London and the South East were among the regions to see rents fall in the past 12 months and the index report suggests that people are looking outside the capital for rental properties. The average rent in the city was £1,203, down 6% month on month and 7.5% lower than a year ago.
While London remains the most expensive place to rent a property, the South East has slipped back in the last year to £845 per calendar month, down 3.9% month on month and 0.9% lower than a year ago.
The North East was the only other region which saw rents decline in both the last month and last year. Prices in this region now average £525 per month after falling 3.7% month on month and 3.1% year on year.
Rents also fell month on month in Yorkshire and the Humber and the East Midlands by 0.7% and 0.6% to £562 and £630 respectively. While in Wales the market is less rocky with rents up 7.7% month on month and 4.8% year on year to £639.
‘Although rents have dropped in the South East as demand continues to outstrip supply for affordable housing, the area remains good value for renters,’ said Valerie Bannister, Lettings Director of Your Move.
The index also shows that yields have continued to fall in most regions with the typical yield 4.5% in March, having declined on both a monthly and annual basis from 5% a year ago and 4.6% in February. The average return for landlords in Wales was unchanged at 4.8%.
The report explains that places with higher house prices continue to have the smallest yields and these are typically in the areas closest to London. In the capital itself the average yield was 3.2% in March, unchanged from the previous month but down on the 3.6% recorded a year ago.
In the South East the typical yield was 3.4%, flat month on month and down from 3.7% a year ago and even in the East of England, where rents have risen strongly, yields have fallen from 4.4% to 3.9% in the last 12 months.
Properties in the northern regions of England, however, saw the highest recorded yields. In the North East the typical return was 5.2% while in the North West it was 5%, although both were down on the same point in 2016. These are the only two areas to see yields above the 5% mark this month.
Arrears levels increase in March. The proportion of tenants in arrears was 9.05% in March, higher than the 8.1% from the previous month. But the index report says that despite this change, the long term trends continue to be encouraging. The proportion of tenants in arrears remains well below the all-time high of 14.6% recorded in February 2010.
