Rents rose to a new record high in July, pushing annual rental inflation across the UK to 2.9%. But tenant arrears also rose, for a second successive month, with 9.3% rent late or unpaid.
According to the latest buy-to-let index from LSL Property Services, which owns national chains Your Move and Reeds Rains, the average national rent stands at £725 per month, up 1% on the month before and surpassing the previous record high of £720 per month last October.
On a monthly basis, rents rose in eight out of ten regions in England and Wales. Rents in the South-East climbed the fastest, increasing by 2.2%. The West Midlands saw the next largest increase, rising by 1.8%. Rents dropped by 0.4% in both the South-West and the East of England.
London’s rents hit a new high for the third consecutive month, following a monthly 1% rise to £1,057.
David Brown, commercial director of LSL Property Services, said: “The backlog of frustrated first-time buyers in the private rented sector showed no sign of clearing in July – in fact, it is still growing. As lending to those without substantial deposits remains depressed, demand for rented accommodation can only go one way in the long-term – providing further upwards momentum for rents.
“The rental market is also entering its summer peak, as recent graduates and those with new jobs begin to look for new accommodation. With more tenants on the move, alongside long-term underlying demand, fierce competition for properties is enabling landlords to increase rental prices to new highs.”
However, tenant finances deteriorated again in July, with total unpaid rent amounting to £295m, 2% more than the £289m late or unpaid in the previous month.
Brown said: “With the economy still in recession, and rents climbing to a new record high, the minority of tenants experiencing difficulty in meeting the monthly rent cheque on time is steadily climbing.
“However, this has not yet fed through into increased mortgage arrears for landlords, with the number of buy-to-let mortgages over three months in arrears actually falling compared to last year.”
Article courtesy of Landlord Today