Newly-let properties achieved 4.5 per cent higher rents in Q1 2015, equivalent to £894 per month according to research.
Providing greater returns for landlords and investors, rents in Q1 2015 outperformed those from the final quarter of 2014 when the average charge to tenants was £853 per month.
The latest figures from Countrywide’s latest Quarterly Lettings Index are representative of high demand between January and March this year and saw rental costs for one and two-bedroom homes rise by 0.8 per cent and 0.4 per cent respectively – equating to average monthly costs of £730 and £817.
In total, newly-let properties attracted 4.5 per cent higher rents in January-March 2015 when compared to October-December 2015; putting the average rental cost at £894 per month.
These overall increases were not representative of constant month-on-month growth however as substantial increases were seen between February and March.
In that period, rents rose by 1.6 per cent for three-bedroom homes and by 16.4 per cent for four-bedroom properties while two-bedroom homes maintained stable rents and one-bedroom properties were actually 1.4 per cent cheaper.
As well as month-on-month differences, the index also found location affected rental values.
Rents in the south-east of England fell by 1.9 per cent during Q1 to an average of £1,097 per month while rents in London rose 3.1 per cent to £2,561 per month.
“Stable rents and declining arrears reflect healthier economic conditions in the UK rental market,” explained Nick Dunning, Group Commercial Director at Countrywide.
Higher yields complement rental rises
Alongside overall rental increases, buy to let landlords also experienced higher yields in the first quarter according to Mortgages for Business’ Complex Buy to Let Index Q1 2015.
Houses in Multiple Occupation (HMO) and vanilla buy to let properties saw quarter on quarter yield growth of 1.4 per cent and 0.1 per cent respectively while semi-commercial properties enjoyed 1.1 per cent higher yields.
These results, combined with higher rental charges, are likely to increase confidence in the industry and help support the thriving market of buy to let mortgages over the next quarter and beyond.