13:34 PM, 17th June 2011, About 12 years ago
Rents are raging out of control in some areas of the country as tenants desperate for a home gazump their rivals and offer higher rents than landlords are seeking.
But buy to let seems a game of two halves – with some regions away from prosperous London seeing rents fall.
Average rents hit a record high in May after four months in a row of rises – with some homes attracting rents that are an average £30 a month higher than in May 2010.
The average monthly rent for a buy to let in England and Wales is now £696 – up 0.5% on April and 4.4% in a year – according to LSL Property Services, one of the UK’s largest letting agents that owns brands like Your Move and Reeds Rains.
In broader economic terms, rents are outpacing the cost of living and increasing at double the rate of wages.
Looking at the underlying figures, rents in London are bolstering the national average as some regions perform worse than others.
Rents in the capital surged by 7.8% in the year, with other big regional increases in the North East (6.4%) and the East Midlands (6.2%).
Buy to let rental losers where rents have fallen are those with rental homes in the South West (-0.4%) and the East (-1.2%).
Paradoxically, rents have risen fastest in the East in May – up 1.4%. The other star performer is the North East, where rents rose by 1.1% in the month.
The three worst performing regions in the month, all seeing rent falls in May, were the West Midlands (-0.7%), the South West (-0.6%) and Wales (-0.2%).
Average yields also hit a new peak at 5.1% in May.
David Newnes, LSL managing director, said: “Tenant demand has been especially bubbly in recent months. Soaring inflation has taken its toll on would-be buyers’ deposit funds. With the fierce competition for homes, rental gazumping is becoming more commonplace and properties are being let beyond asking price, putting further upwards pressure on the market. For tenants, unable to buy, renting is becoming less affordable as demand booms.”