A continued shortage in the number of rental properties on the market is pushing rents upwards in England and Wales, according to a new report.
The most recent Your Move England & Wales Buy to Let Index, collated in partnership with Cebr, indicates that the average rent in these countries now stands at £874 pcm. This follows a 3.1% increase during the last year.
Annually, the largest growth was recorded in Wales, where prices rose by 4.3% during the last 12 months. However, the country remains cheap to rent in, with average rental costs hitting £595pcm.
Following Wales, the next strongest growth was recorded in the South East of England, where the average property was let for £884pcm. This was a rise of 3.6% year-on-year. In the East of England, average rents now stand at £873pcm, following a yearly rise of 3.3%.
Rent increases in many regions can be attributed to a fall in housing stock available to tenants. This can be put down to the recent tax changes impacting on landlords.
The only region in England and Wales to experience year-on-year falls was the South West, where rents slipped by 2.2% to hit an average of £667pcm.
In addition, the data shows that rental yields in many areas have fallen during the last 12 months, from an average of 4.9% to 4.4%. Investors in the North East of England continue to enjoy the greatest returns, of 5.2% typically.
The table below shows a regional breakdown of how rents have changed per region during the last year:
Richard Waind, Director of Your Move, observed: ‘We are now starting to see the real impact of the government’s stamp duty revision, plus the additional tax changes which have hit landlords hard.’
‘The outcome has been a decline in the number of rental properties on the market and this has had the effect of pushing up prices for tenants.’
Concluding, Mr Waind said: ‘The Private Rental Sector could still be seen as an attractive opportunity for investors, with the North East and North West in particular seeing strong growth. Although buy-to-let investors are preparing for the new PRA changes coming into effect in September, it’s clear that there are still people who believe that, property remains a viable investment option.’