Rents across all regions up year on year

UK rents have increased at a consistent pace throughout the last year, with average rent in Q3 reaching £903 per month, the latest data shows.

The index from Countrywide Residential Lettings shows an increase of £21 per month compared to Q2, when the average stood at £882.

In September, average UK rents reached £916 per month – the highest level for 32 months and representative of 5.2 per cent year on year growth.

All regions of the UK saw a year on year increase in rents, apart from the Midlands where neither a rise or fall in rents was noted.

Greater London saw the greatest increase, up 9.8 per cent compared to Q3 2013 while the east of England also saw a rise of 7.3 per cent year on year.

Arrears have also remained stable according to the index, with many regions seeing a decrease and the majority of any increases are below one per cent. 

All property sizes saw an increase in rents on a quarter on quarter and year on year basis, with four-bedroom or larger properties seeing the greatest increase – up 5.8 per cent year on year to £1,524 per month.

Three-bedroom properties were up 4.8 per cent to £956 per month, while growth of 4.1 per cent to £822 a month was noted for two-bedroom properties.

Countrywide also warned that buy to let investors in the South East and London could face having to find 40 per cent deposits to secure mortgage finance, should the Bank of England gain its requested additional powers.

The firm states that it expects the Financial Policy Committee to tell lenders to enforce stricter stress tests – ensuring the income which a landlord receives is greater than interest payments on their mortgages.

Most of these cases will see lending secured against potential rental income that can be generated by the landlord.

Should powers be formally granted, the implementation of stress tests and a potential rise in interest rates would mean landlords would require more equity in order to obtain mortgage finance.

Rents have now reached pre credit crunch levels, please read more on this from Simon Whittaker.

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