However, despite the slight drop in rents compared to last month, this is the second highest rent ever recorded by the buy to let index from Your Move which also shows that rents have grown by 12% in the year to October 2016.
Wales has seen the fastest growth in the last year with rents up by 8% with a typical property let for £591 while the East Midlands and the East of England both saw average rents increase by 6% in the last year up to £628 and £805 respectively.
London has the highest rents overall with the average property let for £1,289 which is 1% higher than a year ago but remains below the levels recorded in the spring months of 2016.
At the other end of the scale, the North East of England was the only place to see rents fall compared to last year, down 1% compared to October 2015. The region also remains the cheapest place to rent a property in England with the average tenant paying £541 per calendar month.
The only other region surveyed which showed no growth in the last 12 months was the South West where the average rent of £668 was flat compared to a year ago.
There was more of a mixed picture when looking at rents on a monthly basis. Across England and Wales the average rent dropped 0.8%, from £907 down to £900 and in the South West rents were down 2.5% compared to September 2016, the biggest fall.
The areas showing the fastest growth between September and October were Wales and London, up 2% in Wales and 1.4% in London.
The index also shows that the average gross rental yield for properties in England and Wales continued to hold firm in October, despite falling average rents. The typical return during October was 4.7%, exactly the same as in the past two months. However, it is down compared to the 5.1% recorded in October 2015.
As in recent months, the North East was home to the highest yields in England and Wales with properties in this region typically returned 5.3% during October, exactly the same as both the previous month and the same point a year ago.
Elsewhere, property investors in the North West and Wales both saw higher yields than the national average. In the North West a typical property returned 5.1% which was flat month on month while homes in Wales saw a yield of 5%, up from 4.9% in September, and Wales was the only area to boast higher yields than the previous month.
Eight of the other nine regions were flat compared to September, while in the South West yields fell slightly to 3.5% while the lowest yields continued to be found in areas with the highest house prices. London landlords saw a return of 3.3%, well below the national average. Despite high rents in this area, the large initial investment means returns are more limited compared to northern regions.
The South East and South West both saw average yields of 3.5% in October, the next smallest in England and Wales.
The index shows that tenant finances improved compared to the previous month with a lower proportion of renters in arrears. Some 9.3% of all tenancies had arrears of a day or more in October, well below the 11.7% recorded in the previous survey.
In addition to this positive monthly result, the long term trends continue to be encouraging. The proportion of tenants in arrears remain well below the all-time high of 14.6%, recorded in February 2010.
On an absolute basis, the number of households in serious arrears, defined as two months or more, was 22,686 in October 2016, well below the 36,502 cases recorded in the previous month.
‘After a turbulent year for the economy it is no surprise the rental market has paused for breath this month. Despite economic uncertainty and the European Union referendum result, the lettings market has powered through the year so far,’ said Adrian Gill, director of lettings agents at Your Move.
http://www.propertywire.com/news/europe/rents-increases-england-wales-levelled-off-october/
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