For the ninth consecutive month, rents increased across almost all areas of England and Wales in October; only Yorkshire and the Humber witnessed decreases, according to LSL Property Services.
The average rent is now £691 a month, a jump of 0.4% on September and 4.5% higher than the same month last year. First time buyers have driven the high demand for rental properties as they continue to struggle to obtain a contractor mortgage, or sit tight waiting for house prices to drop further.
It’s not only tenants who are suffering either. Buy to let landlords are also encountering difficulties getting finance from mortgage lending companies to expand their portfolios to meet the increased demand.
Traditionally the rental market slows down in the run up to the festive season and rent increases will steady temporarily, experts believe. However the underlying trend for growth will remain and further increases are inevitable in 2011.
Rents in the South East leapt by 1.2% during October, the North East witnessed increases of 1%, whilst the Yorkshire and Humber region saw rents decrease of 1.4%.
Investment landlords can expect an average annual return of £13,799 [8.1%] on their property in terms of house price increases and rental income. Whilst this might seem to some to be a good ROI, the amount is down from a peak of 13.4% in May.
Rent arrears also dropped in October, from an estimated £229.3 million in September to £221 million.
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