24 Nov

Rents reach record levels

Rents reach record levels

Residential rents across England and Wales have reached a record high, according to new figures.

An index produced by Your Move and Reeds Rains shows that rents are now an average of £770 month - representing a 1.5 per cent increase over the past year.

There was also a fall in the level of rent arrears despite the record month for rent levels.

In October, rents increased by 0.3 per cent, following on from a 1.9 per cent rise over the previous 12 months.

"Rents have edged to a new record and the rental market is pulsing with new demand. Yet at the same time, tenants are getting on top of their finances helped by a cooling pace of such rent rises,’ said David Newnes, director of estate agents Reeds Rains and Your Move.
 
"Better affordability is good for tenants in the longer run too and for landlords who can rely on steady revenue to pay the bills. That helps to support a virtuous cycle of only gradual rent rises. Alongside slower overall inflation, a material boost to the supply of properties available to let has helped keep rents from rising as quickly as in previous years."

There was evidence of an improvement in tenant finances, with 6.9 per cent of rent in arrears - compared to 7.2 per cent in September and 7.1 per cent in October 2013. Arrears are also just 0.3 per cent higher than the record low seen in November last year.

It would appear that an improvement in job opportunities has helped to lessen the value of arrears, although wage increases remain below the increase in rent.

Mr Newnes explained the rise in properties available to rent has helped many tenants to be able to choose a home that fits their current budget.

Overall, rents in nine out of ten regions are higher than 12 months ago, with the East of England reporting the largest increase of 4.9 per cent, while annual rent rises were just 0.7 per cent in the South West.

According to the index, the average landlord has seen a return, before deductions, of £22,434 in the last year - consisting of £8,404 in rental income and an average capital gain of £14,030.ADNFCR-1222-ID-801762056-ADNFCR

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