The figures come from the LSL Buy-to-Let Index which reveal that the average rent being paid is now £758 per month, which is up by 0.2% since September and 1.9% since October last year.
In addition, the number of tenants in arrears is now at their lowest since 2008 and the total annual returns to be expected for an average rental property have now risen to 9.7%.
The rise means that the average landlord should see a return of around £15,837 per year and should rent increases continue at the same pace then that figure could rise to £24,921 per property over the coming year. That would be a total annual return of 14.5%.
Rent arrears fall in value
Lettings activity is also increasing with 7.4% more new tenancies last month than in September and the amount of late rent being owed has fallen by £49 million in September and now stands at around £245 million. That’s around 7.1% of all rent and is the healthiest figure since LSL began recording this measure in 2008.
The boom in rentals comes despite of the government’s ‘Help-to-Buy’ initiative aimed at getting more people onto the housing ladder and which is helping to push up property prices in most parts of the UK.
However, it appears that this is a very good time to be the landlord of a buy-to-let property.
David Brown, a director of LSL Property Services, said: “It appears that the lettings market is experiencing an extended Indian summer.
“Renting is still relatively affordable with below inflation rises and with struggling wage growth and rock bottom savings rates for the foreseeable future it looks like there will be a healthy private rented sector which is critical for the UK’s economy.”
Another survey, this time from Countrywide, highlights the fact that renting is more affordable for people than buying a house in most parts of London.
Renting property in London is cheaper than buying
On average, renting is at least 10% cheaper than buying.
The Countrywide’s figures also show that rents rose by 1.8% in the year to October, which is a similar figure to that published by LSL, and this rise was almost entirely driven by areas outside of London.
However, rents in London have rocketed by 5.1% in the year to October and this demand is being fuelled by new job creation and some tenants looking to pay lower rents, according to their research.
The Countrywide also reveal that they believe that the average yield on a buy-to-let property has dropped slightly to 6.1% in the past year with the biggest falls recorded in the south-east and south-west of England.
