Your Move has reported that average rents increased in most areas of England and Wales in July, with a fall in housing stock causing prices to rise.
The Your Move England & Wales Buy to Let Index found nine of the 10 regions surveyed saw increases in rents during the past year. The average rent across the two nations now stands at £874 following a 3.1% price increase in the last 12 months.
Every region barring the South West saw rents increase in the year to July, Your Move found.
The strongest performance came in Wales where prices have grown by 4.3% in the last 12 months to hit an average of £595.
Three other areas saw growth of more than 3% in the last year. In the South East prices increased by 3.6% to reach an average of £884 while in the East of England the typical rent is now £873 per month after 3.3% growth. Finally, the North West saw price increases of 3.1% in the past 12 months to reach an average rent of £630.
By contrast, rents in the South West were down 2.2% in the year to July 2017. The average property in this region now lets for £667 per calendar month. This was the only area to experience a decrease.
The increases in most areas can be associated with a fall in the housing stock available to renters. This can be attributed to the recent tax changes affecting landlords and the Stamp Duty charges on second homes.
In London, prices have grown 1.2% in the last 12 months to reach an average of £1,283. However, this headline figure masks big differences depending on the location of the property.
The average property in Travelcard Zone 2 cost tenants £1,831 a month compared to a typical price of £1,161 in Zone 4. Yet high travel costs mean the price benefit of living in the outskirts of London has been reduced.
Richard Waind, director of Your Move, said: “We are now starting to see the real impact of the government’s Stamp Duty revision, plus the additional tax changes which have hit landlords hard.
“The outcome has been a decline in the number of rental properties on the market and this has had the effect of pushing up prices for tenants.
“Tenants in London face a different issue as rapidly rising travel costs are increasing the overall cost of living in the suburbs, despite rents generally being cheaper than central areas.
“The Private Rental Sector, however, could still be seen as an attractive opportunity for investors, with the North East and North West in particular seeing strong growth. Although buy to let investors are preparing for the new PRA changes coming into effect in September, it’s clear that there are still people who believe that, property remains a viable investment option.”