LSL Property Services : Nov 16 Buy to Let Index

BUY-TO-LET INDEX December 2016

London rents end the year on all time high

Key insights about the data

• The average rental property was let for £830 a month in November, the Your Move England & Wales Buy to Let Index found. This figure is 3.9% higher than a year ago, when an average property cost £799 per calendar month.

• On a regional basis, rents increased in nine of the ten regions surveyed during the past 12 months with only the South West seeing a small decline in rents. London remains by far the most expensive place to rent a property in England and Wales.

  South East leads the way

• The South East of England saw rents rise faster than anywhere else in the last 12 months. Landlords in this region saw prices grow 13.6% in the last year to reach £875 per month.

• The rental market in Wales continues to go from strength to strength as prices in the nation have grown 6.2% in the last year. Properties in Wales now attract £584 per calendar month, slightly down on the £591 recorded in October.

• The North East has also seen rents rise faster than the national average increasing by 4.2% year-on-year to reach £542 although this still remains the cheapest place to rent a property in the country, slightly cheaper than Yorkshire and the Humber where rents average £564.

• Just one region saw rents decrease on a yearly basis - the South West. Properties here attracted an average of £663 a year ago and this has fallen to £656 in this survey.

• In absolute terms, London remains the area with the highest rents. The typical rent in the capital city was £1,295 in November, up 1.9% compared to the same point in 2015 but virtually flat month-on-month.

• Across the whole of England and Wales the average rent stood at £830 in November 2016. At the same point in 2015 this figure stood at £799.

Fast Facts

• Average England and Wales rent was £830 in November

• London rents reach new high of £1,295

• South East sees greatest rent increases in last year

• Across England and Wales rents up 3.9% in 12 months

  Quick Quotes

  Adrian Gill, Director of lettings agents Your Move comments:

• "The rental market is still holding strong, despite ongoing pressures elsewhere in the British economy."

• "Landlords are continuing to see strong yield levels and rents are increasing, even if growth is slower than it was previously."

• "Tenants are now in a much better financial position than earlier in the year. Fewer are struggling with rent payments and this is great news for tenants and landlords alike."

• "There is now a great deal of stability in the rental market and this means there is a solid platform for growth in future months."

Key insights about the data

Yield levels remain strong

• With rents generally staying steady between October and November, Your Move found that the average gross rental yield also held firm during the same period.

• Across England and Wales the typical return was 4.7% in November - down from 5% in November 2015 - but exactly the same as in the previous three months.

• The North East was again home to the best yields in England and Wales with properties in this region returning an average of 5.3% - the same as October but higher than the 5% figure recorded last November.

• The North West and Wales - also areas with lower than average house prices - saw yields above the national average. In the North West landlords saw a return of 5.1% while in Wales the figure was 4.9%.

• At the other end of the scale, London was the region which offered the smallest yields. Properties in the capital returned 3.3% on their investment this month, the same as in October, attributed mainly to the fact that, despite high rents, the large initial investment continues to limit returns.

  Arrears levels drop in November

• Tenant finances continued to show some improvement again this month, Your Move found, as the proportion of renters in arrears fell compared to October. Some 8.3% of all tenancies had arrears of a day or more in November, well below the 9.3% recorded last month.

• As well as this monthly improvement, the long term trends continue to be encouraging. The proportion of tenants in arrears remain well below the all-time high of 14.6%, recorded in February 2010.

• On an absolute basis, the number of households in serious arrears - defined as two months or more - was 18,127 in November 2016. This is less than the 22,686 cases recorded in the previous month.

• This survey and its underlying methodology is created and reviewed in partnership with Cebr. It is based on analysis of approximately 20,000 Your Move properties across England and Wales.

BUY-TO-LET INDEX December 2016

Key findings at a glance

Total annual rent and yield from residential property

£950

£900

6.5%

£850

Rents (LHS)

6.0%

£800

£750

£700

£650

£600

Yield (RHS)

5.5%

5.0%

4.5%

4%

2010

2011

2012

2013

2014

2015 2016

Proportion of all rent in arrears

16%

14%

12%

10%

8%

6%

4%

2%

0%

2010

2011

2012

2013

2014

2015 2016

Regional Breakdown

Region	Rents Nov (£) 2016	One month change	Yields Nov 2016
East Midlands	630	1.12%	4.5%
South East	858	-0.46%	3.5%
North East	542	-0.18%	5.3%
London	1,295	0.39%	3.3%
East of England	858	1.9%	4.0%
Yorkshire & The Humber	564	1.07%	4.6%
West Midlands	604	-0.16%	4.2%
South West	656	-3.7%	3.4%
North West	616	0.81%	5.1%
Wales	584	4.5%	4.9%
England & Wales	830	-0.53%	4.7%

Links, Downloads & Images

For more information, images, downloads including the full report, visit: https://www.your-move.co.uk/media-centre

@yourmove_uk