The latest buy-to-let index from LSL Property Services shows that average rents in England and Wales are at £757 a month, only £13 higher than the previously recorded national rent this time last year, showing rents have decreased in real terms in comparison to inflation during the last 12 months. Only slight rent increases were recorded in nine out of ten regions.
The regional breakdown shows that Yorkshire and the Humber has seen only a 0.8% increase in average rents, well below the rate of inflation. London, as ever, is skewing the figures, with a 4.4% annual rise. Only the North-East can boast cheaper rents than Yorkshire.
In light of the huge increases in London however, Labour’s new shadow housing minister Emma Reynolds commented, “As rents hit a record high, worsening the cost-of-living crisis, it is clear millions of tenants are paying the price of the David Cameron’s failure to build enough affordable homes.”
The average BTL investor experienced a total annual return of 7.4% in September, up from 6.4% in August. The average total annual return in the year to September was £12,129, comprising an average annual rental income of £8,164 and a capital gain of 3,965. LSL say that, if rental and property prices continue to follow the trend of the last three months, the figure next year could hit 23,028 (equivalent to 13.6%).
David Brown, commercial director at LSL, said, “Landlords have benefited from strong yield growth for some time but with such a reignited purchase market, there’s now more of a ferocious incentive to invest in the private rented sector than ever before.”
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