Private rents across the UK have risen to their highest level since last November, according to the latest figures published today.
The LSL Buy-to-Let Property Index for April shows the average rent in England and Wales has risen by 0.2% since March to £736 per month. Continued growth leaves rents in April 3.9% higher than a year ago.
For the first time since November 2011, every region of England and Wales has seen rents rise on an annual basis. The biggest increases were in London, where rents are 7.6% higher than a year ago, followed by rises of 5% in Wales and 4.1% in the East Midlands. While the South West was the only region to see annual falls in March, this reversed in April, with annual rent rises of 0.5%.
On a monthly basis, eight out of 10 regions saw rents rise. The highest increase was in the East Midlands where rents rose 0.6% from the month before. This was followed by the North East and the South West where rents posted a 0.5% gain in both regions. Meanwhile, rents dropped the fastest in Wales, falling 0.3%. The second region to see a monthly fall was the North West, with rents in April 0.2% lower than a month before.
David Newnes, director of LSL Property Services, said: “Rents everywhere are higher than a year ago – at a time when pay has crept up at the slowest rate in years. But some regions are suffering even more than others.
"Despite a year-on-year increase across the board, the divergence between London and the rest of the country is continuing, even if a little slower than last month. Meanwhile, other regions with traditionally weaker labour markets are suffering the same rent rises. For example, rental rises of 5% in Wales will be keenly felt.
"Landlords across the UK have increased the stock of rental properties by around 10% since 2008 – but the more fundamental squeeze is still coming from a lack of new building.”
The total amount of rent late or unpaid has improved marginally, despite higher rents. Total arrears in April were £282m, compared to £284m in March. This equates to 8.4% of all rent across England and Wales, compared to 8.5% of all rent in March.
David Newnes concluded: “Optimism is seeping in to the housing market – but from the top. For many tenants the monthly ebb and flow is still draining. Compared to inflation and expectations before the crisis, wages are still seriously under water. Hence slower rent rises in April were a life raft for some. But for the tenants still struggling the most, it could be some time before their ship comes in. Landlords are lending a hand, and will need to keep taking up slack until the economy is on a more solid footing and improvements filter through to everyday wage levels.”