Buy To Let Updated:
The cost of renting across England and Wales rose to a record high in August.
The average rent increased 2.9% on a year earlier to hit £734 a month, according to figures from LSL Property Services.
Rental arrears fell by 2.2% with £288 million late or unpaid rents recorded last month, the first reduction in three months.
The typical return on a rental property in August averaged £8,716, equating to £7,853 and a capital gain of £863, suggesting that landlords are benefiting from the surge in demand for rental accommodation.
"The rental market is right in the thick of its peak season, and the demand from graduates and those starting new jobs has added a new layer of competition on top of the existing pool of frustrated buyers," said LSL Property Services commercial director, David Brown.
"In fact, rents have hit record highs in five regions as tight mortgage finance criteria and large deposit requirements for new buyers continue to ramp up the pressure on the limited stock of rental homes available."
In light of ever-increasing rents, housing charity Shelter has called for more security for tenants, suggesting that landlords should offer tenants long-term tenancies.
"With a generation priced out of home ownership, renting is the only choice for growing numbers of people," said Shelter chief executive, Campbell Robb.
"But with the possibility of eviction with just two months' notice, and constant worries about when the next rent rise will hit, the current rental market is not giving people – particularly families – the stability they need to put down roots."
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