Booming Buy to Let Rents Keep on RisingMake Text Bigger
Buy to let rents are still rising – but not as fast as over recent months.
In October, renters paid landlords an average £720 per month to let a home in England and Wales – 0.2% up compared with September.
Annual rent inflation marginally dropped to 4.1% from 4.3% in October, according to LSL Property Services, the company trading as letting agents Your Move and Reeds Rains.
Although the increase in rents was low compared with previous months, October was the ninth month in a row rents had climbed.
LSL Property Services also disclosed buy to let yields were 5.3% for the month.
Climbing rents are leading to some casualties as 10.1% over tenants either failed to pay or only paid part of their monthly rent.
Arrears for the month totaled £287 million, an increase from the £243 million unpaid in September.
Rents have increased fastest in the South East (1.5%) and the East of England (0.8%) compared with September.
Despite the reported buoyant buy to let market, rents dropped by 1.4% in the North East and the South West, and by 0.8% in Wales.
In London, rents rose faster than anywhere else in the year, up to £1,030 a month, 0.1% higher than September.
David Newnes, LSL Property Services director, said: “Rents are still increasing, but tenants may take comfort from the fact they did not climb at such a blistering pace in October. The recent increases are likely to continue to level out in run up to Christmas – traditionally a slower time for the market.
“Nevertheless, despite the slower rate of increase, the cost of renting is still rising annually at nearly twice the speed of the average salary and many tenants will need to dedicate a growing portion of their disposable income to the cost of accommodation over the next year.”
“Although buy-to-let lending has picked up steam, which has helped expand the supply of rental properties, it is still a long way boosting supply enough to ease competition amongst prospective tenants. With no sustained meaningful increase in lending in light of the ongoing Eurozone crisis, we are unlikely to see a sustained drop in the number of frustrated buyers in the coming year, and underlying demand for limited accommodation will continue to push up rents in the long-term.”
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