Rents rose for a third consecutive month in June, as tenants’ arrears grew.
A total of 9.2% of rent was late or unpaid, according to the latest Buy-to-Let Index from LSL Property Services, which owns national chains Your Move and Reeds Rains.
In total, it estimates that unpaid rent in June amounted to £289m.
In June, the average rent in England and Wales rose by 0.9% to £718 per month, just shy of the record high of £720 pcm last October, and 2.4% higher than in June last year.
On a monthly basis, rents rose in all regions of England and Wales but one. Wales saw the largest rise, with rents increasing by 2%, followed by the North-West and West Midlands where rents rose by 1.7%. But rents dipped in the South-West, falling by 0.3%.
Following a rise of 0.9% to £1,047, London’s rents hit a new high for the second month in succession.
London remains the region with the fastest annual rental growth. Rents in the capital climbed 4%, with tenants paying an average of £41 extra per month compared with June 2011. The South-East had the second highest rental inflation, with rents climbing 3.6% compared to a year ago. On an annual basis, rents remained in negative territory in just the East Midlands after the North-East and Wales returned to growth.
David Brown, commercial director of LSL, said: “The sheer weight of tenant demand continues to push up rents across the country.”
Landlords saw the average total annual return on a rental property rise to 5.4% in June, up from 5.2% in May. This represents an average return of £8,884, with rental income of £7,719 and a capital gain of £1,166.
If property prices maintain the same trend as the last three months, an average investor in England and Wales could expect to make a total annual return of 7% per property over the next 12 months – equivalent to £11,538 per property.
Overall rental arrears deteriorated in June, with 9.2% of all rent late or unpaid at the end of the month, an increase from 8.9% in May. In total, unpaid rent in June amounted to £289m, an increase of 5% from £275m late or unpaid in the previous month.
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Comments
Don't let through Reeds Rains or Your move, this is the second story in as many months which admits they are not very good at contolling tenant arrears.
when prices drop 30-50% banks will start offering 95 or 100% mortgages again,25% hedged elsewhere
but from ftb point of view the amount of deposit for a 1 or 2 bed property could be as low as 3-5k
the current divides are changing as the property bubble bursts
All of a sudden Britain is full of people with 20% depsits and mortgage offers?
I think you must only post on here to appear stupid, it is sad that you are happy to attract mocking attention and seem content to appear so very out of touch with the big big divide in society.
what planet you on...if people are buying there won't be a rented market the size of now,so rents will fall
I know in the newspapers btl is a no brainer,but the informed know what can happen in markets in a very short space of time
if all thes portfolios do start being repoed what is that going to do to rents? thats right a decrease in supply will increase rents further.
Reposession does not increase the availability of mortgage finance to FTB's so the likelyhood is that distressed portfolios will simply be bought up by financially stronger investors.
Too many people not enough property.
If there are fewer properties than applicants, the an agent has a legal duty to their client to take the best rent from the best tenant.
If a tenant becomes unable to pay their rent for whatever reason then it becomes a government responsibility to house them.
what should have happened of course is that we got a houseprice correction like ireland or the US then people would be buying
however,the government bailed the reckless out
BUT btl landlords are struggling when base rates are 0.5% and the net return even if you bought cash is around 3.5% which is what you get in the bank
me thinks ftbs will soon be buying the liquidated portfolios of btl landlords
then no-one will want to rent,creating a downward spiral
When will landlords and letting agents start to get it? Rent levels are more to do with affordability that supply and demand.
A roof over a family's head is not a commodity, but a necessity. As we're seeing, as rents rise, so do arrears. Family's and single people just cannot keep paying more for where they live if their wages don't rise in line with rent increases.
Any returns investors hope to achieve through increasing rents will quickly be eroded if they don't receive their rents and then have to take tenants to court to evict them and collect any monies outstanding.