The rental market in London is picking up again, with rents rising for the first time since November last year, new research shows.
According to online estate agent Your Move, rents in the capital nudged up 0.2% between April and May to reach an average of £1,276.
However, rents are still 1.5% lower than in May 2016, when the typical property cost £1,295 a month.
Across England and Wales the average rent in April went up 1.3% for the month and 2.8% for the year to £814.
Valerie Bannister, lettings director at Your Move, said: “Strong and stable was the catchphrase of the election and this was demonstrated in real terms by the rental sector.
“The majority of England and Wales saw rents increase between Theresa May’s election announcement in April and this survey being conducted in May.
“Even London, which had seen prices fall in recent months, has returned to growth. Prices in the capital grew on a monthly basis for the first time since November 2016.”
On a monthly basis seven regions saw rents rise or hold steady.
Only Wales (-0.5%), the East of England (-0.4%) and the North East (-0.1%) saw rental prices drop between April and May.
This means the North East remains the cheapest place to rent a property in England and Wales at £544 per month.
Your Move found the average yield across all areas of England and Wales was 4.4% in May, exactly the same as in April.
Northern areas continue to boast the highest returns with the North East once again leading the way. Landlords saw an average of 5.2% on their investment in this part of the country, just ahead of the North West where the average yield was 5%.
Separate figures from ARLA Propertymark (Association of Residential Letting Agents) show that 27% of agents saw rent costs rise in May – the highest level since July 2016.
The number of landlords selling up fell in May – in April agents reported four sales per branch, but this figure dropped to three in May.
David Cox, ARLA Propertymark chief executive, said: “Private rents rose by 1.8% in the 12 months to May 20173, and the last thing tenants need is for them to get even higher. With the new government confirming a Tenants’ Fee Bill in last week’s Queen’s Speech, we can expect them to rise by up to £103 a year, hitting loyal tenants looking for long-term agreements hardest.
“This is on top of any natural organic rent growth as well. The only thing which could offset this would be to significantly increase rental stock, but until this happens and supply and demand meet in the middle, rents will only become more and more unaffordable.”
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