Private rents show slight downturn

To let signsPrivate rents edged down in November for the first time in eight months, but the relief for tenants will be brief in the overheated sector, a study warned.

Average rents fell by 0.4% month-on-month in England and Wales to £741 a month as the traditional seasonal slowdown took hold, according to the latest buy-to-let index from lettings agent network LSL Property Services, which owns chains Your Move and Reeds Rains.

However, rents are still 3.4% higher than they were a year ago and 39% of landlords expect to put rents up in 2013, compared with 1% who expect rents to fall, according to recent research from the property network.

Six out of 10 regions saw rents drop month-on-month in November and the largest fall was in the South East, where rents declined by 1.9% to average £766 a month.

But rents continued their upward march in London, rising by 0.2% month-on-month to reach £1,104. Rents are now 6.9% higher in London than they were a year ago, mirroring strong house price jumps seen in the English capital.

Wales saw the biggest monthly increase in rents, with a 1% rise taking them to £552 on average, although Wales is the only area where rents are lower than they were a year ago, recording a 2.4% annual drop.

David Newnes, director of LSL Property Services, said: "Landlords look to avoid having properties empty over the Christmas period, and are often more flexible on pricing at this point in the year.

"But the rental market has not ground to a halt by any means. The housing market is still haunted by the demons of undersupply of new homes and tight credit conditions for buyers with the smallest deposits, which is pushing up tenant demand.

"This is cushioning the downwards pressure on rents normally seen in the final months of the year, and will see rent rises return as competition intensifies in spring."

Rents have soared over the last year as would-be buyers have struggled to raise the 20% deposit regularly demanded by lenders or meet their toughened borrowing criteria in the weak economy.
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