Rents drop again for buy to let landlordsMake Text Bigger
Buy to let rents nudged down by 0.6% in February – the third fall in the past year, according to the UK’s largest chain of letting agents.
Letting activity dropped back over recent weeks, according to LSL Property Services, mainly due to the end of the stamp duty holiday for first time buyers triggering a buying frenzy.
Rents have fallen slightly since November, after rises for nine months in a row.
The average monthly rent in England and Wales is £707, according to LSL, which runs brands Your Move and Reeds Rains.
Landlords in the Midlands saw the largest fall, down 2.2% in the East Midlands and 1.8% in the West Midlands, while rents in the North East, South West and Wales, all went up.
Tenants are paying an average 3.5%, or £24, a month more now compared to the same period last year.
London saw the biggest year-on-year increase, with rents up 5.6%, followed by Eastern England up 5%.
LSL director David Newnes said: “In the longer term, it’s difficult to see a prolonged decrease in the tenant demand underpinning rental inflation. There are already indications that mortgage lending is falling back, and that mortgage rates are beginning to climb, which will limit the number of prospective homebuyers leaving the rental sector.”
The firm also revealed yields are up for landlords, thanks to a moderate increase in property values.
LSL calculates they jumped from 3.6% in January to 4.2% for buy to lets. The annual figure was also on the rise, from 5% a year ago to 5.2% in February.
Rent arrears dropped in February as 9.3% of all rent was late or unpaid at the end of the month – a total of £285 million. This is a fall from the 10.7% of unpaid in January and December.
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