By Marcus Leach
Rents rose for the sixth month in a row in July, to a new record high, according to the latest Buy‐to‐Let Index from LSL Property Services.
In July, the average rent in England and Wales rose by 0.6% to £705 per month, surpassing the previous high of £701 in June. With annual inflation at 4.2%, the average rent is now £29 per calendar month higher than July 2010. The average yield reached 5.2% in July, up from 4.8% a year ago.
London saw by far the greatest annual rent increase in England and Wales. In July, rents hit a new high of £1,009 per month — an annual increase of 7.1%.
The next biggest rises were in the North East where rents increased by 5.5%, and the East and West Midlands, where rents rose by 4.8%. In the last year, average rents have risen in all regions except Wales, where they now are at the same level as July 2010.
On a monthly basis, rents increased fastest in the South East, where they rose 1.7%. In Wales and the East Midlands, they increased by 1.4% compared to June. Rents declined in three regions — the West Midlands, where they fell by 0.6%, Yorkshire & the Humber and the North West, where rents fell by 0.2% and 0.1% respectively.
“Rents are on an upward trajectory, and it is unlikely that tenants will gain respite any time soon," David Newnes, estate agency managing director of LSL Property Services said.
"Demand from thousands of frustrated buyers each month is underpinning buoyant competition for rental homes, enabling landlords to increase prices. This is the peak summer season, with more renters on the move, the market will continue to heat up.
"Such strong demand and high rental incomes has forced lenders to take notice, and more are returning to the sector. As a result of the competition in the buy‐to‐let market, the range of affordable products is expanding — and lending to investors rose by 21% in the last quarter. Nevertheless, even with squeeze on landlord finance abating, the new supply will not be enough to meet demand from tenants."
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