The average residential rent across England and Wales is now £761 per month. This is £3 higher than the previous record £758 set in October 2013.
On a monthly basis August rents are on average 1.1% higher than was seen in July – or an increase of £8.
This leaves monthly rents 2.4% higher than a year ago – in August 2013 average monthly rents previously stood at £743. In absolute terms this annual growth represents an increase of £15.
Commenting, David Brown, commercial director of LSL Property Services, said: “Autumn is when more people move to take up new opportunities, to build new careers and to start new chapters. That is what the rental market is all about for many people by providing flexibility and it’s what it does well – at a cost that’s risen in line with inflation for at least half a decade.
“No year is the same, and already 2014 has been like no other. The reawakening of mortgage lending startled the property market into a new spring of life earlier in the year. The benefits have been felt across the board, not just for first-time buyers but for tenants too. Investment means rents are now only 1% higher in real terms than at the start of 2010.”
Rents in seven out of ten regions of England & Wales are higher than a year ago. This is led by the South West where rents are up 3.5% on an annual basis, followed by the South East at 3.4%, and the North West with a 3.3% annual rise.
London was not in the top three, with annual rent rises of only 3.0%.
Rents in the North East are in fact 1.6% lower than a year ago, while the West Midlands and Wales experienced annual falls of 0.4% and 0.1% respectively.
As of August gross yields on the typical rental property in England and Wales stand at 5.1%, representing a fall of 0.2% from one year ago, down from 5.3% in August 2013.
However compared to the previous month gross yields are up slightly from 5.0% seen in July 2014.
Taking into account price growth and void periods – but before costs such as mortgage repayments or maintenance – the total annual return on an average rental property stands at 12.7% over the twelve months to August. This is up from 6.4% in the year to August 2013, and an increase of 0.6% since July, when returns were 12.1%.
Brown concluded: “Landlords have benefited from higher property prices which is helping portfolios to expand and more homes become available to let. Gross rental yields are still in line with long-run averages, and rental income is more reliable as personal finances gradually leave the great recession behind them.
“Meanwhile, the threat of interest rate rises is being held off by economies in the rest of the world marching to a slower tune. Landlords are seizing this cocktail of opportunities. And most critically – when landlords boost profits by adding to the supply of homes, this keeps rent rises lower, and helps pass some of the benefits of these factors onto tenants.”