Rents retreat in August
- Rents drop on a monthly basis, down 0.1% since July to stand at average of £803 per month in August
- Annual pace of rental growth tempers to 5.5% over the last twelve months, down from 6.8% in July
- While London and the South East slow, rents across the Midlands and East of England hit all-time highs
- Despite slower rent increases, tenant finances worsen – as the proportion of rent in arrears rises to 9.9%
- Landlords see gross yields steady at 5.1% while total annual returns stand at 9.3% including capital growth
Rents across England and Wales have fallen on a monthly basis for the first time since March, despite fresh records in three regions, according to the latest Buy-to-Let Index from Reeds Rains.
Average rents fell by 0.1% on a monthly basis, down from £804 in July to stand at an average of £803 in August. On an annual basis rents are now 5.5% higher than in August 2014, representing a slowdown since July when annual rent rises stood at an all-time record of 6.8%,
Adrian Gill, director of estate agent Reeds Rains comments: “August has witnessed a break in a series of blistering rent rises.
“Yet this mild correction comes on the back of a whole year of acceleration. Rents are rising rapidly on an annual basis, underpinned by an improving economic picture for many potential tenants – and the peak lettings season is only just about to start this autumn.”
“There is also no major change to the fundamentals of supply and demand. This means that in the longer-term, faster rent rises may become a semi-permanent feature of the British property market. Alongside purchase prices, rents will continue to rise rapidly until something happens to address a drastic shortage of homes in the UK.”