The UK's largest lettings agency network has released its latest snapshot of the UK buy to let market, it seems like pretty pleasant reading all round on the face of it.
According to the index rents in England and Wales rose for the fifth straight month in August, with rents 1.2% higher than July and 2.9% higher than August 2011. But arguably even more pleasant is the fact that tenant arrears fell for the first time in 3 months.
This could indicate that the general economy is improving and people can better afford their rents. However it could just be because people are spending less now the kids are back at school. But, not so pleasantly, it could be because landlords have got rid of the tenants who were struggling to pay in favour of better tenants – lord knows the market would certainly allow them to do so.
Unlike the last index, which seemed to suggest that the UK rental market was slowing, this one paints the opposite picture. According to LSL rents fell on a monthly basis in only 2 regions, in Wales rents fell by 0.6% compared to July, and in the West Midlands rents fell by 0.4% on the month. Wales also saw rents fall on an annual basis by 1.8%, making it the worst performing region, although rents also fell annually in the South West by 1.9%, they grew 0.6% on the month. In the West Midlands rents were still 3.6% higher than a year ago.
Unsurprisingly London saw the biggest year on year increase at 4.9%, the South East was next with 3.9% followed by the Humber and West Midlands tied on 3.6%. In the monthly figures the South East stole the show with rents up by 2%, apart from that only London and the East of England were above 1% with rents up 1.6% in both, the East Midlands just made 1% and all other regions were below 1%.
London might be seeing the biggest rental increases, but in terms of yields it is the opposite end of the country that is doing the business. In August average yields in the North West hit 7.3% and in the Humber region investors were yielding 6.7% on average. Only the East and West Midlands came close to this level with 6% and 5.9% respectively. Yields in London averaged 5%, lower than those in the North East at 5.2%.
- Monday 24 September 2012