March 01, 2011
UK tenants welcomed the second consecutive monthly fall in housing rental prices this January, as investors piled into the buy-to-let market, current research has indicated.
Prior to 2011, a mismatch between supply and demand in the rental market was thought to be driving up rental prices across England and Wales. But according to LSL Property Services, the average rent dropped by 0.3% to £682 a month this January as the mismatch began to ease.
With fewer people moving home around the festive season, many landlords reduced the amount they charged during these months to avoid having their properties empty. However, despite the fall, rents were still 4% higher than they were a year ago, after they hit record highs during the second half of 2010.
"The recent loosening in the buy-to-let mortgage market has boosted the supply of rental homes on the market, a crucial factor in the temporary drop in rents,” said David Newnes, Managing Director of LSL Property Services.
"With more products coming onto the market, there are signs that this trend is continuing into 2011, allowing a growing number of professional landlords to get onto the market, or broaden their portfolios, and take advantage of near-record rental income and strong tenant demand.
In addition to falling rents, fewer tenants were late paying their rent in January, although the group estimates that a total of £258 million of rent went unpaid last month.
But while some areas of the country saw steep falls in rents and improving cases of arrears, the cost of being a tenant continues to rise in other regions.
Average rents rose by 0.9% in the East Midlands, increased by 0.8% in both the West Midlands and Yorkshire and the Humber, and edged ahead by 0.2% in London.
