Average rents in the UK reached £734 pcm in August, surpassing July’s record rent of £725pcm – an increase of 1.2%. Compared to August 2011, rents went up by 2.9% this August.
The data comes from the latest Buy-to-Let Index from the UK’s largest lettings agent, LSL Property Services plc. In all, 8 regions saw increases in rent, five of which were record rises. The South East saw a rise of 2% on last month – the fastest rise – while London and the South East saw increases of 1.6%. Rents fell in Wales and the West Midlands.
On a year-on-year basis, London and the South East saw rental inflation reach 4.9% and 3.9% respectively. In the South West rentals went down by 1.9%, and in Wales by 1.8%.
The average total annual return in August was 5.3%, an increase on July’s 5%. These figures represent a return of £8,716. This is a rental income of £7,853 and a capital gain of £863.
For the first time in three months, August saw an improvement in tenant finances. In total, 9% of all rent was late, down from 9.3% in July. Unpaid rent stood at £288m, a reduction of 2.2% on July.
Our landlords buildings insurance customers will be heartened by news of improved tenant finances, which occurred despite the summer holidays – a period that can add pressure to tenants’ budgets. Caution should be exercised however, as wage rises are significantly below rental increases, which experts say will maintain the pressure on the budgets of many tenants