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Rents have eased back for the first time in almost a year – dropping around £7 a month to an average £717, according to one of the UK’s largest letting agents.
Annual rent inflation has tumbled from 4.1% in October to 3.5% in November, but rents are still an average £25 higher than 12 months ago, says the latest monthly buy to let report from LSL Property Services.
The fall in rents is the first for 10 months.
Nationwide figures show rents rose the most in Yorkshire and Wales – both seeing 1.2% increases – while six regions saw falls, with the biggest drops in the East Midlands (-2.2%) the South East (-2.1%).
Average rents in London were up 4.2% in the year to £1,033, which is £41 a month higher than rents in November 2010.
Landlords are also seeing unwavering yields despite falling property prices with returns on investment for November standing at 5.2%.
Unpaid rent totalled £263 million – down 8% on October and dipping below 10% of all rents to 9.3%.
David Brown, commercial director of LSL, said: “Landlords are looking to avoid having properties vacant over the Christmas period and can be less aggressive with pricing as tenant activity slows in the run up to the New Year.
“But across the country the limited supply of rental accommodation means there will still be strong upward pressure on rents in the early part of 2012.
“The government missed a golden opportunity in the Autumn Statement to give the private rented sector a fillip, and encourage the investment needed for the long-term supply of rental homes to match demand.
“Extending the stamp duty holiday to buy-to-let investments would have removed a financial obstacle in the path of new investors, easing the strain on the current limited stock of properties.
“However, with the failure to even extend the holiday for first-time buyers, despite the new mortgage indemnity scheme, demand for rental accommodation from frustrated buyers will continue to increase as we progress through 2012, as rents resume climbing.”
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