BTL rents show slight increase in June
Monday, 27 July 2009 10:02 AM
Buy-to-let landlords might have something to smile about finally as the latest research published today shows rents rose for the first time in three months.
LSL Property Services, which commissioned the research, says nationally average rents rose to £649 per month, up just a fraction of one per cent compared to what tenants were paying in May. This leaves average monthly rents 3.4 per cent lower than August 2008 when average rental payments reached their peak.
Last year rents were escalating way above the rate of inflation, increasing over by 7 per cent. Rental payments in London rose fastest in June, up 1.7 per cent to £900 per month on average, while those in the North West slid 1.4 per cent to £526 per month. Over the last year, tenants in the South East are celebrating rents falling by 6.6per cent, while in Wales, landlords have increased rents by 4.9 per cent. All of which help to prove the generally mixed picture of the overall property market in the UK.
Meanwhile, rental arrears also appeared to be on the up. The total amount of unpaid rent in the UK rose by £1.5m in June to just over £254m. But the total number of tenants who were behind with their rent actually fell, from 557,000 in May to 529,000 in June. Typically tenants in arrears are lower earners living in cheaper rental homes. However, in the last six months, there has been a shift with those in more expensive rental property now also falling behind with their payments, says LSL.
In January the average tenant in arrears typically paid two thirds (66 per cent) of the average rent. Now a typical tenant in arrears lives in a home costing three quarters (76 per cent) of the average.
A spokesman for LSL said: "Rent arrears are second only to leaving a house lying empty for the financial pain they cause landlords. Most of the improvement in June was among those only a few days late, but there has also been a small drop in those more than a month behind too.
"Those who suffered first from the recession were those in lower paid jobs, often the most disposable workers when employers look to cut. But the downturn is progressively affecting tenants on higher incomes as they begin to fall behind with their rent."
