Date Published 20 November 2012
Rents in England and Wales have hit an all-time high at an average of £744 a month, LSL has reported.
However, the pace of rise has slowed, and tenant arrears have fallen to their lowest level for nearly two years, the report from the parent company of lettings chains Your Move and Reeds Rains says.
Tenants saw average rents rise by 0.4% in October, the slowest rate of increase since May.
Despite the slowdown, the monthly rise is double the size of the 0.2% increase seen in the same period last year. After seven months of rent rises, rents are 3.4% higher than at the same point last year.
In London and the South-East, rents continued to rise, albeit at slower rates of 0.9% and 0.7% respectively. Five regions saw rents fall in October, with the sharpest falls in Wales, down by 1.6%, and the East Midlands, down 1.8% – the first fall in this region since March.
On an annual basis, rents rose the fastest in London. They increased by 7% to £1,102 – breaking the £1,100 barrier for the first time.
David Brown, commercial director of LSL Property Services, said: `Rents may be rising but the good news for tenants is that the rate of increase is at its lowest in five months. However, despite the deceleration, the fact that monthly rents rose by twice the rate of a year ago points to the underlying strength of tenant demand.
`Looking ahead, it’s difficult to see rents remaining stationary once the winter lull has passed.`
The total amount of rent late or unpaid fell to the lowest level since January 2011, with total arrears of £265m, down from £297m in September. This equates to 8.1% of all rent across England and Wales. Brown said the main reason seemed to be that tenants had cut down on other spending as a necessity.
He said: `Whether tenants can keep up this prudence over the festive season remains to be seen. 2013 will bring more austerity, and if rents rise further, arrears are unlikely to continue to fall.`
* The latest Move with Us rental index suggests that average asking rents are now £974 across the country.
For the second month running, the index – which was only launched in September – is wildly at odds with the longer-standing LSL index.
The estate agency and property services network says that this was a 0.6% monthly increase in October and an annual rise of 2.85%.
Advertised rental prices in London rose by 0.99% in October. This trend suggests that sustained growth in London is likely in the medium term. London remains the most expensive place to rent with average advertised rental prices now at £2,300 per month.
In the North-East, advertised rental price increases shot up by 5.35%. This is the largest absolute price increase at £34 compared with the £22 per month increase in Greater London. However, house values in the North-East are falling.