UK homeowners that also rent additional properties are continuing to benefit, with a third consecutive average rent increase.
According to the latest Buy-to-let Index from LSL Property Services, the average rent in England and Wales rose 0.9 per cent to £718, closing in on the record high of £720, which occured in October 2011.
As a result of the monthly rise, the pace of annual rental inflation also increased, climbing to 2.4 per cent from 2.3 per cent in May, LSL said.
Of the ten regions in England and Wales, only the South West saw a dip, dropping 0.3 per cent. Of those increasing, Wales had the highest increase (2 per cent), followed by the Midlands and North West, both of which saw increases of 1.7 per cent.
London
Prices in London continue to break records, with the 0.9 per cent rise taking the average price up to £1,047, setting a new record for the second consecutive month.
Year-on-year the capital continues to be the fastest increasing area on price, with tenants paying an average of £41 extra in June 2012, compared to June 2011.
Landlords saw the average total annual return on a rental property rise to 5.4% in June, up from 5.2% in May, an average return of £8,884.
Demand
LSL’s property services commercial director David Brown said: “The sheer weight of tenant demand continues to push up rents across the country. Lending criteria remains tight and the number of mortgages given to first-time buyers – especially those without substantial deposits – is still a long way from the level seen before the credit crunch.
“With higher rents and the growing cost of living eroding how much tenants can save towards the large deposits required to buy, it’s no surprise to see the private rented sector swelling by 262,000 households a year.
“But shorter-term factors were also at play in June. The rental market tends to see a flurry of activity at this time of year as tenants look to move before the onset of summer holidays, but this trend has been exacerbated – especially in London – by tenants moving with urgency to secure properties ahead of the disruption of the Olympics.”
