Rents continue to rise across the country as average residential rates surpassed £800 for the first time in July. This happened in conjunction with the fastest monthly rise in rents since records started six years ago.
The increasingly lopsided supply-demand in the rental market is causing the average rental prices to soar. The average rent increased across England and Wales was declared to be 1.9% up from June, Your Move and Reeds Rains buy-to-let index revealed. The average residential rent is now £804 per calendar month, a rise of 6.8% from the previous year.
An ease in house price growth is influencing the residential rental market too, causing rental yields to rise in order to compensate. Rents were up in 10 regions, with London (12.1%) and East of England (12%) experiencing the highest rise in rental prices year-on-year.
The total annual returns for landlords on a rental property dropped in July, with overall returns of 8.7 per cent across England and Wales, for the year ending July 2015. This is another noteworthy fall from 10 per cent June, having already fallen from 12.5 per cent for the year ending July 2014. Due to this, landlords across England and Wales received on average gross return of £15,632, with rents received making up £8,444 and capital increases adding £7,188 in the year to July.
To slow down the rapid rise in rents, an increased effort to construct new-build properties will need to be made. More options and help for those looking to downsize would also help to alleviate the swell in demand, and make the most of the existing supply.