Residential rents reach record highs

Rents in England and Wales climbed to a new record high of £770 per month in October, latest research has revealed.

The Buy to Let Index for October from Your Move and Reeds Rains revealed that rents are up 1.5 per cent on a yearly basis from the same month in 2013.

On a monthly basis, rents increased by 0.3 per cent but growth was actually slower than that noted in the previous two years. In the 12 months to October 2013, growth of 1.9 per cent was noted while that figure increased to 3.4 per cent for the year preceding that.

“Rents have edged to a new record and the rental market is pulsing with new demand,” said David Newnes, director of estate agents Reeds Rains and Your Move.

“Yet at the same time, tenants are getting on top of their finances helped by a cooling pace of such rent rises.

“Better affordability is good for tenants in the longer run too and for landlords who can rely on steady revenue to pay the bills.”

He added that this was supporting a cycle of gradual rental increases and that slow increases in housing supply meant rents were not rising as fast as in previous years.

Geographic differences

Rents in nine out of ten regions of the UK are higher than they were a year ago, with the East of England seeing the highest annual rises, at a rate of 4.9 per cent. Meanwhile the East Midlands and the North West also saw steady increases, rising by annual rates of 3.6 per cent and 3.1 per cent respectively.

London and the South West saw the slowest growth in comparison with October 2013, with rents up by 0.5 per cent and 0.7 per cent in these locations. However, they still performed better than the North East where rents were 0.5 per cent lower than they were 12 months ago. On a monthly basis, the majority of regions saw increases but four areas were lower in October than in September.

This is in contrast to the previous month when not a single region experienced a fall in rents on a month by month basis. London and the North West experienced a monthly fall of 0.3 per cent while the North East saw them fall by 0.2 per cent on a monthly basis. Yorkshire and the Humber was the fourth region to see a drop in rents month on month, down 0.1 per cent.