The annual change in asking rents has gone into growth for the first time since the start of the index in January 2008, with the year-on-year change now standing at 1.9%. Despite the recent rises, rents remain 3.9% or £34pcm lower than the peak of £873pcm in Q1 2008.
According to the Q1 2010 FindaProperty.com Rental Index the rise in rents is down largely to the fall in the number of rental properties available and high demand from individuals who might have bought had the lending market not been restricted. Stock levels of property to rent remain at their lowest level since October 2008.
In the regions, the majority of areas saw asking rents rise, the highest rise being in Yorkshire and Humberside (+3.4% to £553pcm). Only Wales and the North East experienced falls, (-0.9% to £641pcm and -2.3 to £591 respectively).
Renting in the capital continues to rise in expense with rental values up 2.6% in Q2, now standing at £1729 (£44pcm higher than Q1). On an annual basis asking rents in London are now 6.4% higher than a year ago. The number of rental properties available in London fell by 4% in Q2, which put upward pressure on rents. Landlords in the capital are also enjoying an increase in rental yields, up to 4.71% from 4.62%.
Nigel Lewis, at FindaProperty.com, said:
“The new budget may lead many to consider delaying their first steps on to the property ladder and, as more people rent, this will put more pressure on the lettings sector. A small number of properties came on the market during the second quarter but overall stock levels are still down. Demand is likely to outstrip supply for a while yet and rents will keep being pushed up as a result.
“Landlords, many of whom rode out the downturn watching rents plummet as unwanted sales stock was offloaded onto the rental market, will be cheered and it’s tenants who are now facing a painful market.”
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