Landlords in England and Wales has seen a strong start 2017 with rents rising in every region but one, according to a buy to let index.
The research by Your Move looked at the year to January and found the area with the quickest growth in rents is the east of England with the average tenant now paying £870; that's an increase of nearly 7% in the year to the end of January.
Other strong growth areas include Wales where rents rose by 6.5% and in the East Midlands where they grew by 4.5%. Average rents in Wales are now £586 while in the East Midlands they are £634.
However, rents in London fell by 0.4% from December to January.
The average rent in England and Wales is now £798, a slight rise on the figure for January last year of £790 though it's a fall from December's £811.
The yields for buy to let properties
When the yields for buy to let properties are analysed, landlords in London enjoyed the lowest returns with 3.2% while landlords in the north east saw the best yields of 5.3% while the average return is 4.6%.
The lettings director at Your Move, Valerie Bannister, said: “Compared to the same point the year ago, rents have increased in nearly every region while yields continue to be squeezed in many areas with all regions seeing lower returns than a year ago.”
However, a report from the Association of Residential Letting Agents (ARLA) points out that in the months to come, a lack of supply will see rent rises across the country.
Their figures reveal that demand for homes to rent in December and January rose by 13% while the number of homes to rent grew by just 3%.
‘The number of tenants increasing by a much larger margin’
Arla's chief executive David Cox, said: “New Year brought a flurry of activity in rentals with the supply of stock rising slightly but the number of tenants increasing by a much larger margin.
“With demand and supply out of kilter, as they have done so for so long, the market is not balanced and is not fair for tenants and rents will continue to rise.”
Nearly one in four of Arla's membership say they witnessed rent increases in January but this is a fall from January 2016’s figure of 30%.
Mr Cox warned: “The cost of letting agent fees will need to be recouped and will be passed on in inflated rent prices and along with the new landlord’s tax means the rental market is far from reaching its equilibrium.”
