13:15 PM, 3rd November 2010, About 13 years ago
Buy to let rents are surging to record highs as a shortage of properties and mortgage restrictions puts a brake on home sales.
Average rents are now £698 per month, after straight months of rises that have pushed them up 3.1% in a year, according to the LSL Property Services Rent Index.
The data comes from the firm’s letting agent brands – like Your Move and Reeds Rains.
David Brown, LSL Commercial Director, said: “Landlords have seen tenant demand continue to hit new heights. The mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder.”
“As a result, demand for rental accommodation is increasing, and supply is not rising enough to match it. This has turned the buy to let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”
Regionally, London and the South East are outperforming the rest of the market. In September, landlords hiked rents by 1.1% to £972 per month – 6.8% increase since January.
“There is an acute lack of affordable housing in London, and would-be buyers cannot meet higher house prices – or get big enough mortgages,” said Brown.
“With rental properties so sought after in the city, landlords have been able to continually hike rents since January. In the last twelve months, the average London landlord would have made an annual total return, including capital growth, of nearly £34,000 on a typical rental property.”
However, National Landlords Association (NLA) chairman David Salusbury said: “Research has shown 58% of landlords did not increase their rent in the last 12 months and a further 12% decreased rents.
“The survey also found more than two-thirds of landlords have no plans to increase rents over the next three months.”
“The reality facing the sector is one of VAT increases, expected interest rate rises and a current lack of mortgage finance, all of which landlords have to cope with.”
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