Tenant arrears have fallen to the lowest level since 2008 despite record high rents, providing further evidence of a buy-to-let boom.
The total amount of late rent across England and Wales fell to £245m in October, down from £273m at the same time last year, according to the latest Buy-to-Let Index from LSL Property Services.
As a proportion, this represents 7.1pc of all rent – one percentage point lower than last year.
The falls come despite the fact the average monthly rent across England and Wales rose to a new record high of £758 in October, up 1.9pc since October 2012.
Rents fell in five of the ten regions in England and Wales over the year however, including the East of England, the Humber, the North East, the North West and the West Midlands.
In further good news for landlords, lettings activity accelerated in October. The number of new tenancies agreed across England and Wales increased by 7.4pc compared to October 2012.
The buy-to-let market is currently in rude health as landlords benefit from record high rents, rising house prices and increasing yields.
LSL Property Services predicts if rental property prices continue to rise at the same pace as over the last three months, the average buy-to-let investor in England and Wales could expect to make a total annual return of 14.5pc over the next 12 months, equivalent to £24,921 per property.
David Newnes, director of LSL Property Services, said: “At a time when a seasonal slowdown would usually be expected rents are up again. The lettings market appears to be experiencing an extended Indian summer. Normally we can expect the rush of early autumn to fade into a late autumn hibernation. Even as the nights draw in, demand for homes to rent seems unabated, and still well ahead of a year ago.
“The first rung of the housing ladder is still a big step up. Despite a healthier circulation of mortgages, even a 5pc deposit is fast becoming a challenge for many would-be first-time buyers.”
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