In May, the average rent in England and Wales rose by 0.4% to £712 per month, with rents returning to their January level. Despite the monthly rise, the rate of annual increase slowed, with rents 2.3% higher than a year ago, compared to 2.4% in April.
On a monthly basis, rents rose in the majority of the regions, with the highest rises in the North West and East Midlands, where they rose 1.7% and 1% respectively. Compared to April, rents declined in four regions, with the largest falls in the North East, where they fell by 1%, and the West Midlands, where they decreased by 0.9%.
Rents rose annually in all but three regions, with rents falling by 1.5% in the East Midlands, 0.7% in Wales and 0.3% in the North East. Rents rose the fastest in London and the South East, where they increased by 4.2% and 3.1% respectively.
David Brown, commercial director of LSL Property Services comments:
“The end of spring has brought with it renewed activity in the rental market, and rents have returned to the level seen before the impact of the stamp duty deadline rush by first-time buyers. The reality is that thousands of frustrated buyers are still financially trapped between a rock and a hard place. Historically high rents and rock-bottom savings rates are hampering attempts to save for the larger deposits banks now require – not to mention meeting the cost of the reinstated stamp duty tax. In turn, fewer tenants are able to leave the sector, and the strong tenant competition is pushing up rents as a result, making saving for a deposit harder still.
“However, it’s not just involuntary renters that are adding to demand. Given the current concerns over the economy and labour market, the flexibility of renting is proving attractive for those adopting a wait-and-see approach to house purchase. Given this appetite for rental accommodation, rents are unlikely to see sustained declines any time soon.”
