Rents rose faster in the East Midlands and the South West than anywhere else in England and Wales during the past 12 months, the Your Move Rental Tracker has found.
Average prices in the two regions rose by 3% in the year to May. Prices in the South West now stand at £682 while in the East Midlands it’s £656.
Across all regions the average seasonally adjusted monthly rent now stands at £861 and as London prices continue to fall, other regions have stepped up and are now growing faster than the capital.
Martyn Alderton, national lettings director at Your Move, said: “Landlords will be encouraged to see strong rent growth and solid yields in most areas of England and Wales.
“However, for renters the East Midlands and South West have seen prices grow faster than anywhere else in the UK. Meanwhile landlords in most of the nine regions surveyed have seen their returns remain steady this month, contrasting the recent declines we have seen.”
The East Midlands and South West regions both recorded growth of 3% in the year to May, significantly ahead of the 0.3% annual drop in London.
Prices in the East Midlands and South West stand at £656 and £682 respectively, but both are well behind London, which remains the most expensive place to rent in England and Wales. The average property in the capital now lets for £1,273 per calendar month.
While prices in London have fallen year-on-year, other regions have seen greater price falls. In Wales the average rent charged is down 2% and now stands at £587 while in the North East the average property costs £536 following a fall of 1.6%
The London data, however, continues to mask differences in prices across the capital. For example, a property located in the London Travelcard Zone 2 costs an average of £1,492 a month while a property in Zone 5, much further from the centre of the city, costs £1,079.
On a monthly basis, Wales was the area which saw the biggest price fall, with typical rents down 0.4. The fastest growth between April and May was in the South East, where prices went up 0.4%. in the last year.
Landlords in Wales saw their average yield fall from 4.7% to 4.6% this month, while those in the North West saw a drop from 4.9% to 4.8%.
Investors in the remaining seven regions all saw their returns stay the same in May. Northern regions continue to offer the highest percentage returns.
In the North East the average landlord enjoyed a return of 5% on their investment while in the North West they got a return of4.8%.
This compares to just 3.2% in London, although as prices in the capital tend to be much higher, the absolute return can often be more than other regions.
Across all of England and Wales, landlords enjoyed an average yield of 4.17% this month. Fall in number of struggling tenants
The financial situation of tenants improved this month as there was a drop in the number of households in arrears.
Your Move reported that 9.2% of all tenancies were behind with their payments this month, lower than the 9.4% recorded in April.
This fall is the first this year, although the arrears rate has been close to the 9% mark through 2018 so far.
Encouragingly, the proportion of tenants in arrears remains well below both the recent and all-time high recorded by Your Move.
The all-time high of 14.6% was recorded in February 2010 while the most recent high of 13.7% was found in July 2017.