Average buy to let rents still rising

The average cost of renting a buy to let home was up 2.4% in April 2013 to £793 a month compared with the month before – but landlords several regions saw rents fall.

Those in the North East, Midlands and Wales were all in the red – with the largest drop of 7.8% to an average £544 from March to April in the North East. Despite the fall, rents in the region are still 7.5% higher than at the same time last year.

Meanwhile, renters in London were hit by the second highest annual average rental increase of 4.8%, taking the cost of a buy to let home up to £1,236 a month.

The figures, from landlord insurer Homelet also revealed average earnings for renters dropped 1.3% to £27,500 a year.

“Renting a home in the capital is still more expensive than anywhere else in the UK, and a significant £100 more a week than in the South East,” said Ian Fraser, HomeLet’s managing director.

“However, the rate of increase has slowed, and other areas in the South East are catching up. With larger increases of 7.5% and 6.2% in the North East and East Anglia, Greater London’s rents are no longer rising as steeply as in previous years.”

The research disclosed the average cost of renting a home in London rose by 8.1% from April 2011 and 9.3% from April 2010. This April’s rental rise of 4.8% is around half of the rate of increase two years ago.

“The combination of lower income and increase in average rents could be a result of two factors,” said Fraser.

“The increase in the number of people moving into a rented home may have created more buoyancy within the lettings market in Greater London, and helped to keep average rents at a more stable level than a few years ago when they were increasing at a high rate.

“The lower rate of increase could be a sign that people simply cannot afford to pay such high rents.

“The capital’s stabilising rents could also reflect how the lettings industry is increasingly being seen as a long-term family solution. The private rented sector is no longer a housing stop-gap for our nation.”


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