The July 2012 Buy to Let Index from LSL Property Services in partnership with The Wriglesworth Consultancy has been released today, providing a measure of the average rental prices in England and Wales for July 2012.
- Rents hit new record high in July, rising to £725 per month
- Average rents climb by 1% compared to June, pushing annual rental inflation to 2.9%
- Tenant arrears rise for second successive month, with 9.3% of rent late or unpaid
David Newnes, director of LSL Property Services comments as follows in the latest Buy to Let Index Report from LSL Property Services and The Wriglesworth Consultancy published 17th August 2012.
“The backlog of frustrated first-time buyers in the private rented sector showed no sign of clearing in July – in fact, it is still growing. As lending to those without substantial deposits remains depressed, demand for rented accommodation can only go one way in the long-term – providing further upwards momentum for rents. The rental market is also entering its summer peak, as recent graduates and those with new jobs begin to look for new accommodation. With more tenants on the move, alongside long-term underlying demand, fierce competition for properties is enabling landlords to increase rental prices to new highs.”
“Rents have returned to record highs, average yields have hit their highest levelthis year, and returns are healthy, tempting many investors into the market. Banks and Building Societies are tapping into this robust demand, and buy-to-let is the only sector of the mortgage market showing consistent growth, with lending increasing 18% year on year. It’s crucial that lenders continue to increase their commitment to property investors to allow the private rented sector to expand at the rate needed to accommodate the growing number of frustrated would-be buyers.”
“With the economy still in recession, and rents climbing to a new record high, the minority of tenants experiencing difficulty in meeting the monthly rent cheque on time is steadily climbing. However, this has not yet fed through into increased mortgage arrears for landlords, with the number of buy-to-let mortgages over three months in arrears actually falling compared to last year.”