Rents fell to the lowest levels for four months in December as landlords looked to avoid empty properties, the latest Buy-to-Let Index from LSL Property Services has found.
The average rent in England and Wales fell by 0.9 per cent in December to £734 per month, although they stood at 3.2 per cent higher than a year ago, just below the 3.4 per cent annual inflation of November.
Seven regions saw rents decrease in December, compared to November. The joint-largest falls were in the East of England and North East, where rents dropped by 1.7 per cent. These were closely followed by London were rents fell 1.5 per cent and the South East with a 1.3 per cent fall. Three regions saw monthly increases; the fastest rise was in the West Midlands, where rents posted 1.3 per cent growth. Next was the South West, with a monthly rise of 0.9 per cent, while rents in Wales crept up by 0.4 per cent.
On an annual basis, rents remain higher than a year ago in eight out of ten regions. London has seen the largest annual rise (6.3 per cent) followed by the South East where rents were 3.9 per cent higher than the previous December. This comes despite lower rents than a year ago in the East Midlands and Wales – with falls of 1.2 per cent and 0.8 per cent respectively.
David Brown, commercial director of LSL Property Services, comments: “Rents may have returned to August levels but it’s a seasonal blip rather than an about-turn in the market. Tenants were in a stronger bargaining position as landlords reduced rents to fill empty properties in the slower winter months, yet as the New Year progresses the underlying weakness in the mortgage market will mean competition will heat up once more. Long-term problems remain for new buyers looking to leave the rental market, and Funding for Lending is proving a double-edged sword. While rates are coming down for those with large deposits, extremely low saving rates are hitting those still trying to pull together a deposit – a problem accentuated by the record low base rate.”
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