Average rents 'on the rise'

28th December 2011

Average rent prices have risen over the course of the last 12 months, new figures show.

According to the latest Buy-to-Let Index from LSL Property Services, which owns the UK's largest lettings agent network, including national chains Reeds Rains and Your Move, average rents have increased by 3.5 per cent annually despite a monthly decline.

Furthermore, total annual returns for landlords increased to 2.2 per cent, with growing rental income balanced by capital losses.

The figures reveal that the average price of property rent is now £25 higher per month than in November 2010.

The increased profitability of the private rented sector could see more landlords with block insurance venturing into the market.

Rents rose in all regions of Britain, with the fastest rising rents on an annual basis occurring in London and the south-east, where they increased by 4.2 per cent.

Average rental prices in London have risen by 0.3 per cent to £1,033 per calendar month since October, despite the annual rate of increase slowing down.

For tenants, this represents a rise of £41 per month compared to November 2010.

The lowest rent rises were in the north-east and the south-west parts of England. David Newnes, director of LSL Property Services, pointed out that after their relentless march upwards throughout the year, the rate of rental increases seems to have taken a "pause for breath".

"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," he said.

"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."

He added that the government missed out on an opportunity presented by the Autumn Statement to encourage the investment needed for the long‐term supply of rental homes to match demand.

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