Rental market sees 'early spring'

to let signsPaul Faith/PA Wire/Press Association Images

Rents are back on the rise after the market sprung into life "unseasonably early" this year, lettings agents have said.

The typical rent rose by 0.1% in January to £712 a month in England and Wales, the first month-on-month rise since October, according to LSL Property Services, which owns chains Your Move and Reeds Rains.
This also marks the first time there has been a rent rise in the month of January since the records began in 2008. The market saw a boom last year as trapped renters were unable to raise the deposits needed to get on the property ladder, although rents eased back slightly towards the end of 2011.

David Newnes, director of LSL Property Services, predicted more rent increases as housing market transactions remain low. He said: "The rental market burst back into life unseasonably early in January, with tenants on the move trying to take advantage of what is usually a quieter period for the rental market.

"The depth of the underlying demand sustained a higher level of competition for rental property during the Christmas period, preventing more severe falls in rents than we'd normally see during the period."

He added: "Mortgage lending has shown signs of improving in recent months, but transactions remain at almost half their historic levels, and the increasing dependency on rental accommodation will drive further rent rises over the long-term."

Tenants are also staying put for longer amid the rent hikes, typically renting homes for a "record" duration of 19 months, the Association of Residential Letting Agents (Arla) said this week.

But LSL Property Services said the general rent increases did not translate into good news for all landlords, as there have been strong regional variations. While London landlords saw total returns per property of around £13,099 over the last year, in the North East, falls in house prices meant that average annual returns worked out at a loss of £3,929.

Labour housing spokesman Jack Dromey said: "The Prime Minister and the Housing Minister told the House of Commons 'rents have been falling'. Now we know that is not the truth.

"The stark figures expose the truth - rents are rising almost everywhere. David Cameron and Grant Shapps are simply out of touch with the everyday lives of millions of people who hand over rent each month."

© 2012 Press Association
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