The latest lettings index from Countrywide has shown that the average monthly rent in the UK now stands at £866 a month, the highest level in two years.
The Countrywide Monthly Lettings Index for July 2013 found that yields remain strong with the highest yields being achieved in Wales at 6.6%.
Average monthly rents have increased year-on-year for all sized properties apart from four-plus bedroom properties which are down 5.5%. The region which saw the greatest increase was East of England where rents have increased 5.2%.
The survey also found that rent arrears have fallen in all regions apart from Scotland and Central London.
Analysis from the UK’s largest lettings agency showed that yields remained strong in July with the average yield 6.1%. The greatest yields were achieved in Wales at 6.6%, Midlands at 6.5% and North at 6.4%.
Four-plus bedroom properties saw the greatest increase in average monthly rents in July, with a 3.8% month-on-month increase to £1,471pcm, despite falling 5.5% year-on-year.
Two-bedroom properties saw an increase of 1% to £787pcm, followed by three-bedroom properties up 0.9% to £898pcm and one-bedroom properties up 0.8% to £689. All sized properties saw a year-on-year increase in average monthly rents apart from four-plus bedroom properties.
The average monthly rent in the UK increased 1.4% in July to £866pcm, the highest level for more than two years. Despite some regional increases the average monthly rent fell in Central and Greater London and Scotland, with Central London seeing the greatest decrease, down 2.8%. Scotland has the lowest average monthly rent at £636pcm and Central London the highest at £2,414pcm.
Rent arrears fell year-on-year in all regions apart from Scotland and Central London. Average monthly rents are up 6.2% year-on-year in Scotland but arrears are also up 4.1%. In Central London rent arrears increased 0.2%.
Nick Dunning, group commercial director at Countrywide plc, said: “Countrywide’s Monthly Lettings Index reveals that the cost of renting continues to be higher in relation to the cost of monthly mortgage payments, with the average monthly rent now £866pcm.
“According to recent data from the Council of Mortgage Lenders, lending to buy-to-let landlords is now at its highest level for nearly five years. However, despite more competitive buy-to-let mortgages encouraging investors to expand their lettings portfolios and increase the supply of rental accommodation on the market, we have on average four to five tenants for every rental property we are marketing.
“Rental values are being underpinned by the increasing number of people living in the private rented sector and rents are likely to continue rising unless supply and demand becomes more aligned.”