Rents dipping and arrears rising, say letting agencies

Rents across England and Wales have dipped by 0.1 per cent and now stand at an average of £803 per month.

Annual rental growth has slowed to 5.5 per cent compared to 6.8 per cent just four weeks ago. 

However, while London and the South East slow, rents across the Midlands and East of England have hit all-time highs.

At the same time, the proportion of rent in arrears has risen to 9.9 per cent while landlords are seeing gross yields roughly static at 5.1 per cent.

Those are the lettings market headlines from the latest Buy-to-Let Index from Your Move and Reeds Rains.

Particularly worrying may be the rent arrears rise. Tenant arrears made up 9.9 per cent of all rent payable in August 2015, up from 8.4 per cent just a month ago and 8.0 per cent back in August 2014. 

“Rents are being bid up by the vast majority of tenants, many of whom are seeing their incomes rise substantially for the first time in many years. However ... compared to rapidly growing demand there is a real shortage of available properties to let across the country. This means that inevitably, rising rents will not be good news for everyone” says a spokesman for the agencies.

“We will be releasing new, separate figures on the most serious arrears very soon. However, there is a need for action. This involves more investment from landlords in properties to let – and action from the government to allow the building of more new homes of all tenures” he says.