Letting agency view The LSL Buy-to-let index in September revealed that rents rose in every region in the country for the first time on record. The average rent in England and Wales rose by 0.7% to £718 taking the annual rental increase year on year to 4.3% or £29 per month. Rents hit a record high in six regions: London, the South East, Yorkshire and the Humber, the East of England, Wales and the East Midlands. London rents increased fastest of all rising by 5.8%, followed by the South West and the West Midlands where rents rose 5.4% and 5.1% respectively.


Such rises would lead one to believe that tenant arrears may have risen similarly, but instead they dropped significantly to their lowest level since April 2010. Just 8.6% of all UK rent was unpaid or late by the end of September, down from the 10.7% of rent unpaid or late in August.


However total annual returns on a rental


property dropped back after taking into account the fall in year on year property prices. The average total annual return in September was 1.8%, the equivalent of £3,005 – £7,661 in rent, with a capital loss of £4,666. However, property price changes in the last quarter have held up better than in the previous 12 months, and if they maintain the same trend as the last three months, a property investor could expect to make a total annual return of 8% over the next 12 months. n


mortgage introducer NOVEMBER 2011 55


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