Average rents growing at fastest rate since September

Average rents are now rising at the fastest rate since last Autumn, bringing the average monthly rent in England and Wales up to £793.

Your Move and Reeds Rains' latest Buy-to-Let Index shows that rents increased by 0.3% between March and April – the fastest monthly rate recorded since September 2015.

Monthly rents in England and Wales are now 2.4% higher than this time last year – equivalent to an extra £19 per month for the average tenant. 

In April, average rents in three regions hit an all-time high. 

The average rent in the East of England is now £848 after rental growth of 4.8% over the last year. 

With annual rental growth of over 6%, the West Midlands has also set a new record as the average monthly rent in this region has eclipsed £600 for the first time.

Meanwhile, the average monthly rent in the East Midlands is now over 8% higher than this time last year, bringing the average tenant payment to a record of £616.

According to the agents' findings, the average landlord in England and Wales saw total rental returns of 10.7% in the 12 months to April. 

This figure dipped slightly since the previous month, but remains higher than the 9.8% recorded in the 12 months to April 2015.

Before any deductions such as property maintenance and mortgage payments, the average landlord has seen a total return of just under £20,000 over the last 12 months, according to Your Move and Reeds Rains.

Over half of this is made up of capital gains, while the remainder is made up by rental income.

The report also shows that tenant arrears are in decline. 

In April, 8.1% of all rent due was in arrears. This is lower than the 9.1% recorded in March but not as low as the 7% recorded the previous April.

The highest proportion of due rent in arrears was recorded in February 2010 at 14.6%.

“Some of the reasons for rent rises are extremely encouraging," says Adrian Gill, director of Your Move and Reeds Rains. 

"Tenants looking to find a property to rent are more likely to be in work, getting pay rises, and feeling able to pay their other bills."

He says, however, that stamp duty surcharge costs incurred by landlords are likely to be shouldered by tenants due to the 'fundamentals of supply and demand in the British housing market'.

“Yields and returns have been remarkably steady in the face of an onslaught of hostile rhetoric and regulatory hoops," adds Gill.

He argues that the stamp duty surcharge is now a 'barrier to entry' and is likely to prevent new houses and flats coming to market in the rental sector.