Rents rise for the first time in 2011 - Money - News - Moneyfacts

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Rents rise for the first time in 2011

Rents rise for the first time in 2011

Category: Money

Updated: 18/03/2011
First Published: 18/03/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Rents rose for the first time this year in February, with tenants facing a monthly bill of £684.

The cost of renting in England and Wales has now risen by 3.9% in the last 12 months, figures from LSL Property Services show.

The rise so early in the year is uncommon as there is usually a lull in the rental market but increased demand for properties has pushed prices upwards.

It means that landlords can now expect an average yield of 5%, as the cost of rents increased at a sharper rate than the value of buy-to-let properties in the month.

Although London recorded a modest increase in rents of 0.3% compared to January, rents have now risen by 7.7% in the last 12 months, almost twice the national average and reflecting the especially tight market in the capital.

The greatest monthly increases were in Wales, where they rose 1.9%, the North West and the East Midlands, where they rose 1.1% and 0.8% respectively.

The biggest decreases were in the North East, where rents fell 1.4%, Yorkshire and the Humber and the South West, where they fell 1.2% and 1% respectively.

"The fierce competition among renters in many areas of the country has cut short the traditional lull we tend to see between December and February," said David Brown, commercial director of LSL Property Services.

"The consistently constrained level of lending to home buyers has bolstered demand – and rents – in the private rental sector during what is typically a slower period. 158,000 fewer first time buyers were unable to enter the market in the last 12 months, compared with three years ago.

"With the mortgage market even more sluggish since the start of 2011, this backlog of frustrated buyers has increased even further and rents have risen correspondingly."

However, economic pressures saw tenant finances continue to worsen, last month. Some 12.6% of all rent in England and Wales was unpaid or late by the end of February.

Unpaid rent totalled £296 million, up from £258 million in January.

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