Average monthly rent tops £800
A buy-to-let Index from Your Move and Reeds Rains found that average monthly rents are now rising quicker than at any point since 2009.
In July, the average rent in England and Wales reached £804. This follows a 1.9% increase on the previous month.
One year ago, the average rent stood at £753 meaning tenants are paying 6.8% more today – the biggest annual rise on record.
Many regions outside of London are now seeing rents hit record highs. Prices in the capital are more expensive than they have ever been with the East Midlands, West Midlands and Yorkshire & the Humber regions also hitting record highs.
However, high rents are causing increases levels of arrears. Last year the number of households in arrears was 7.3%, this has now risen to 8.4%.
Landlords’ profitability has also improved, the typical yield rising to 5.2%, the survey found.
Adrian Gill, director of estate agents Reeds Rains and Your Move, said: “Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear. We’re seeing rent rises manage to hit record-breaking speeds on both monthly and yearly timeframes as far back as our data can go.
“But rents are just a small part of the larger economic machine. The fact that they’re purring along at higher-than-ever speeds is a sign that the rest of the economy is picking up. An engine can’t use fuel it doesn’t have. These rent rises are a reflection of heavier wage packets being fed back into economy now that the rust from the recession has been cleaned off the cogs.
“A clear and concerted effort towards new-build properties is the most sensible way to address this issue. It boils down to supply and demand. However, it’s not the only possible response. The government could also ensure that we’re making the most efficient use of our small supply of homes – for instance by doing more to make it easier for people to downsize their properties when they want to.”