According to research from LSL Property Services, the typical rent paid in England and Wales rose for the fifth consecutive month in August, increasing by 2.9 per cent to reach £734 per month.
Demand for rental accommodation across the country is strong, with little movement in house prices and potential buyers still struggling to obtain the finance they need.
London is still the strongest performer, with rents having increased 4.9 per cent year-on-year, but the east of England has also seen a 3.9 per cent rise, and other areas of the country are also seeing an increase in rents. David Newnes, director of LSL Property Services, commented: “London and the south east may be the powerhouses of the national rental market, but rent rises haven’t been limited to these areas by any means.
“In fact, rents have hit record highs in five regions as tight mortgage finance criteria and large deposit requirements for new buyers continue to ramp up the pressure on the limited stock of rental homes available.”
For landlords, the average total return for August was 5.3 per cent, a rise of 0.3 per cent and further encouragement for property investors.
However, while times are reasonably prosperous, now may be the right time for landlords to look at their outgoings, and see whether any changes can be made to reduce these and maximise returns. This could involve restructuring a buy-to-let mortgage, or shopping around for a better rate on landlord insurance. Yet agency fees should also come under consideration - and this is not just related to how much is paid for the services, but what services are provided.
Recent research from Shelter recently indicated that a quarter of tenants feel “ripped off” by the high fees charged by some letting agents, with some asking for more than £500 in ‘administration costs’.
Yet landlords are also being overcharged, Shelter claims, with some unscrupulous agencies charging both landlords and tenants for the same administration.
Kay Boycott, director of campaigns, policy and communications at Shelter, said: “It’s scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide.”
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