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Rents rise and tenancies soar

National average rents have broken records yet again, increasing 4% on the month and 11% annually to £779 – an 11 year high according to the recent Sequence National Rental Report – September 2013

London’s rents have risen to £1,465, a 2% growth on month and 8% annually.

New agreed tenancies have reached a three year high, up 8% on month and 17% annually.

Across the UK tenant demand remains strong with new tenant registrations up 2% on July 2013 and 11% on August 2012. In London the number of tenants has grown by 5% on month.

The average length of a tenancy in London has increased from 12 to 18 months as people continue to be priced out of the sales market.

Buy-to-let mortgage applications rose 31% annually as investors are attracted to high yields over low saving interest rates. But the supply of new properties available to rent is flat on month, a stark contrast to levels of demand.

Stephen Nation, Head of Lettings at the 300 branch Sequence Group which includes Barnard Marcus, William H Brown, Fox & Sons and other leading brands, comments:

“As we predicted, August has been another record breaking month, with the number of new tenancies up 8% on last month and 17% annually. Average national rents are at their highest level for 11 years, but this has not deterred tenants, with demand up 2% on the month and 11% annually. The supply of new properties to the market has seen no change on the month and if this continues to be outstripped by demand then we will see further significant rises in rents.

“The London picture is very similar, with the number of people looking to rent increasing by 5% on month, but the number of new properties available decreasing by 1%. As a result of this competition rents in London grew by 2% on month and activity levels in the capital have been phenomenal, with new tenancies agreed rising by 12% both on month and annually.

“Buy-to-let mortgage applications are up 31% annually, the highest increase for over two years. This is in line with the Bank of England’s announcement that banks have lent a record £5billion in Q2 this year, which indicates that buy-to-let has not relinquished its status as the investment of choice for those looking to bolster their savings returns.”

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