13:21 PM, 22nd June 2012, About 11 years ago
Rents are still rising and are unlikely to drop anytime soon, according to one of the UK’s leading letting agents.
Average rents in England and Wales edged up by 0.4% in May to £712 a month in May – increasing for the second month in a row as the market settled after the end of the stamp duty holiday for first time buyers in March.
Tenants are paying around the same as they were in January, but although rents are up, the rate of annual increase has slowed to 2.3% from 2.4% in April.
Landlords in most regions enjoyed a month-on-month rent rise – with those in the North West gaining the most (1.7%), while rents in the North East fell the most – by 1%.
David Newnes, director of LSL Property Services, the firm compiling the figures, said: “The reality is that thousands of frustrated buyers are still financially trapped.
“Historically high rents and rock‐bottom savings rates are hampering attempts to save for the larger deposits lenders now require. Fewer tenants are able to buy and strong tenant competition is pushing up rents, making saving for a deposit harder still.
“Given the current concerns over the economy and labour market, the flexibility of renting is proving attractive for those adopting a wait‐and‐see approach to house purchase. Given this appetite for rental accommodation, rents are unlikely to see sustained declines any time soon.”
The survey also looked at yields and arrears for landlords.
Steady property prices helped the average buy to let yield to rise to 4.8%, up from 3.7% in April.
Rent arrears improved after increasing in April, with 8.9% of all rent late or unpaid at the end of the month, down from 9.9% in March. In total, unpaid rent in May was £275 million, down from £306 million in the previous month.
LSL Property Services runs national letting agencies Your Move and Reeds Rains.