Rental values for the three months to May were up 10.7 per cent on last year with tenant income also growing to improve affordability
The HomeLet Rental Index for May revealed that annual growth was up considerably from 2014 and 2013 with increases of 7.7 per cent and 2.7 per cent noted respectively.
Although rents are on the rise, tenant incomes also increased by 2.4 per cent in the three months to May 2015 compared to the same period a year ago.
Rents for new tenancies in London are up 9.2 per cent compared to last year and monthly rental values were £124 more; up from £1,348 per month in 2014 to £1,472 per month in 2015.
When considering national rents for the three months to May, average rental values were up across all 12 regions of the UK.
This provides a boost for buy to let landlords and investors as higher rental returns can be coupled with increased capital appreciation to improve the overall returns available.
With London excluded, average values climbed 7.6 per cent for the three month period – up from £686 per month a year ago to £738.
Annual and monthly comparisons
On an annual, rather than quarterly basis, UK rents in May rose to £960 which represents a 12.5 per cent increase from a year ago.
Average rental values for the UK overall, with London excluded, amounted to £751 per month which is up £60 on May 2014.
Wales noted its first annual increase in rental values for six months in May while seven UK regions noted increases for the tenth consecutive month. These were Greater London, Yorkshire and Humberside, South East, South West, East Anglia, West Midlands and East Midlands.
London noted exceptional growth in the past year, with rents up by 10.7 per cent annually and 2.4 per cent on a monthly basis.
In May, the average rental values for a property in the capital passed £1,500 to £1,506 per month and was 100.5 per cent higher than across the rest of the UK.