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Rents have bounced back to a record high as the mortgage squeeze forces would-be buyers to rent a home and into the hands of buy to let landlords.
Average rents in England and Wales in April hit £692 a month – a peak last seen in November, according to LSL Property Services, one of the UK’s largest letting agent networks.
Rents are now 4.4% higher than 12 months ago, with average yields weighing in at 5.1% as rents outpaced property prices.
David Brown, commercial director of LSL Property Services, said: “The rental market is heating up as thousands of would-be tenants have taken advantage of the weather and long weekends to hunt for new rental homes.
“Even a slightly stronger supply of property has failed to cool rental inflation as landlords take advantage of the growing number of mortgage products available. Competition is fierce and tenants are paying a premium to secure properties. The average landlord is charging nearly £30 more a month than a year ago, and the rate of increase is unlikely to tail off as lending to first-time buyers remains subdued and demand for rental homes is stronger than ever.”
LSL Property Services owns popular rental chains like Your Move and Reeds Rains.
The biggest rent rises were seen in London over the past year, up 7.9% since April 2010 to nudge £911 per month in April 2011.
Rent increases in the capital have rippled out to the south east, which has seen a 5.7% surge in rents over the last 12 months to hit £705 per month.
The only region in England and Wales that has seen a rent decrease over the past 12 months is the east, with a marginal 0.8% drop to an average rent of £709 per month.
Rent arrears went up in April, with 11.8% of all rent unpaid or late by the end of the month, up 2.4% from March. Tenants owed £284 million, an increase of nearly 27% from the £224 million unpaid in March.
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