Landlords with buy to let mortgages saw rents rise for a fifth consecutive month as tenant arrears fell for the first time in three months.
Landlords with buy to let mortgages saw rents rise for a fifth consecutive month as tenant arrears fell for the first time in three months.
LSL Property Services said in England and Wales the average rent rose by 1.2% to £734 per month in August, surpassing July's record high of £725. Rents climbed by 2.9% compared to August 2011. Tenants saw rents reach record highs in five regions in August, hitting new peaks in London, the South East, the East of England, the North West and Yorkshire & the Humber. On a monthly basis, rents rose in eight regions.
The South East saw rents climb the fastest for the second month, rising by 2%, while rents in both London and the East of England rose by 1.6%. Rents decreased in Wales and the West Midlands. London and the South East have seen the fastest rent rises compared to August 2011, with rental inflation at 4.9% and 3.9% respectively. On an annual basis rents fell in two regions, decreasing by 1.9% in the South West, and by 1.8% in Wales.
David Brown, commercial director of LSL Property Services, said: "The rental market is right in the thick of its peak season, and the demand from graduates and those starting new jobs has added a new layer of competition on top of the existing pool of frustrated buyers. London and the South East may be the powerhouses of the national rental market, but rent rises haven't been limited to these areas by any means.
In fact, rents have hit record highs in five regions as tight mortgage finance criteria and large deposit requirements for new buyers continue to ramp up the pressure on the limited stock of rental homes available." Brown said some relief for tenants may be found if the Funding for Lending scheme begins to feed through into greater lending to borrowers with smaller deposits. But he said any improvement to the first-time buyer mortgage market will need to be significant and sustained to dent rental demand markedly in the long-term.
