Your Move has revealed that recent rent increases in England and Wales levelled off
in October, with the average property being let for £900pcm.
This figure was marginally down on September’s total of £907, the Your Move England & Wales Buy to Let Index found.
Despite the slight drop in rents compared to last month, this is the second highest rent ever recorded by this survey. Across England and Wales rents have grown by 12% in the year to October 2016.
Adrian Gill, director of lettings agents Your Move, said: “After a turbulent year for the economy it is no surprise the rental market has paused for breath this month.
“Despite economic uncertainty and the European Union referendum result, the lettings market has powered through the year so far.
“The underlying market remains strong and we expect growth to resume in future months. Landlords continue to see impressive yields and the UK property market continues to be a safe and secure place to invest.”
Your Move has found that the average gross rental yield for properties in England and Wales continued to hold firm in October, despite falling average rents.
The typical return during October was 4.7%, exactly the same as in the past two months. However, it is down compared to the 5.1% recorded in October 2015.
As in recent months, the North East was home to the highest yields in England and Wales. Properties in this region typically returned 5.3% during October, exactly the same as both the previous month and the same point a year ago.
Elsewhere, property investors in the North West and Wales both saw higher yields than the national average. In the North West a typical property returned 5.1% – at month-on-month – while homes in Wales saw a yield of 5%, up from 4.9% in September.
Wales was the only area to boast higher yields than the previous month. Eight of the other nine regions were at compared to September, while in the South West yields fell slightly to 3.5%.
The lowest yields this month continued to be found in areas with the highest house prices.
London landlords saw a return of 3.3%, well below the national average. Despite high rents in this area, the large initial investment means returns are more limited compared to northern regions.
The South East and South West both saw average yields of 3.5% in October, the next smallest in England and Wales.
Tenant finances improved compared to the previous month with a lower proportion of renters in arrears, Your Move found. Some 9.3% of all tenancies had arrears of a day or more in October, well below the 11.7% recorded in the previous survey.
In addition to this positive monthly result, the long term trends continue to be encouraging. The proportion of tenants in arrears remain well below the all-time high of 14.6%, recorded in February 2010.
On an absolute basis, the number of households in serious arrears – defined as two months or more – was 22,686 in October 2016. This is below the 36,502 cases recorded in the previous month.