RENTS hit a new high in October, according to LSL Property Services’ monthly buy-to-let index, published today, though the rate of increase fell to its lowest since February.
The average rent in England and Wales rose by 0.2 per cent in October to £720 per month, the index showed.
The increase compares with a jump of 0.7 per cent in September, and over the last 12 months rents have risen by 4.1 per cent.
London’s tenants experienced the highest annual rate of increase at 5.7 per cent.
However, the monthly rate in the capital declined from 0.4 per cent in September to 0.1 per cent in October.
The south east saw the highest monthly rates of increase, at 1.5 per cent in October and 1.8 per cent in September.
“Tenants may take comfort from the fact that rents did not climb at such a blistering pace in October,” said LSL Property Services’ director David Newnes.
“Nevertheless, despite the slower rate of increase the cost of renting is still rising annually at nearly twice the speed of the average salary.
“Many tenants will need to dedicate a growing proportion of their disposable incomes to the cost of accommodation over the next year.”
Analysts believe the situation for tenants will not improve any time soon, particularly as would-be first-time housebuyers struggle to raise deposits.
“Until the first-time buyer mortgage market springs back into life, and competition amongst prospective tenants eases, rents can only go one way,” said Jonathan Moore of easyroommate.co.uk.
Rents fell by 1.4 per cent in the north east and south west, and by 0.8 per cent in Wales in October.
Meanwhile, the Knight Frank house price index for November, also published today, shows the falls in prices beginning to slow.
The index rose from 42.1 in October to 44.7, closer to the “no change” reading of 50.