Rents hit new record

Rents across England and Wales have overtaken all previous records, according to the latest Buy to Let Index from LSL Property Services.

Average rents across England and Wales rose to £757 per month in August, after a monthly increase of 1.8%. On an annual basis, this leaves rents 2.1% higher than September a year ago.

Rents now stand at levels £13 per month higher than the previous all-time record, set in October 2012 when monthly rents averaged £744 across England and Wales.

Record Rents

Record rents also mirrored faster lettings activity. The number of new tenancies across England and Wales increased by 6.5% compared to August, taking the number of new lettings in September to levels 9.2% above those seen in September 2012.

Gross yields on a typical rental property rose to 5.4% in September, compared to 5.3% in August. Taking into account capital accumulation and void periods between tenants, total annual returns on an average rental property rose to 7.4% in September, compared to 6.1% in August. In absolute terms this represents an average return of £12,129, with rental income of £8,164 and capital gain of £3,965.

If rental property prices continue to rise at the same pace as over the last three months, the average buy to let investor in England and Wales could expect to make a total annual return of 13.6% over the next 12 months, equivalent to £23,028 per property.

Source: Financial Reporter