Rents grew slowly in August to reach an all-time record high, according to the latest buy to let index from LSL Property Services.
It means average rents in England and Wales are now £761 per month, £3 higher than October 2013’s previous high of £758.
Rents in August were up by an average of 1.1 per cent on a monthly basis compared to July, equivalent to an £8 increase.
As a result, rents are 2.4 per cent higher than a year ago when the average rent was £743, represented by a £15 increase in real terms.
David Brown, commercial director of LSL Property Services, added that peaks in the autumn are usually noted in the rental sector so further increases could be expected.
“The reawakening of mortgage lending startled the property market into a new spring of life earlier in the year,” he explained.
“The benefits have been felt across the board, not just for first-time buyers but for tenants too. Investment means rents are now only one per cent higher in real terms than at the start of 2010.”
Rents in seven of ten regions are higher than a year ago, with the South West leading the way – up 3.5 per cent from last August.
The South East and North West also noted increases, up by 3.4 per cent and 3.3 per cent on an annual basis while London rents were up by three per cent from last year.
However rents in the North Easy are down 1.6 per cent from a year ago while annual falls were also noted in the West Midlands and Wales, of 0.4 per cent and 0.1 per cent respectively.
Gross yields remain stable, standing at 5.1 per cent for a typical rental property across England and Wales in August.
While that represents a drop from 5.3 per cent on an annual basis, a slight rise from five per cent was noted on a monthly basis.
When price growth and void periods are considered – but without repayment and maintenance costs – the total annual return on an average rental property is 12.7 per cent in the 12 months to August.
This is up from 6.4 per cent in the year to August 2013 and is up by 0.6 per cent on a monthly basis from July when total returns were 12.1 per cent.
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