Rents resume upward march

The cost of renting edged up by 0.1% in January, and is up 4.3% on last year, according to new figures.

The rise follows two consecutive months of price falls, and means the average monthly rent in England and Wales is now £712 – some £30 higher than 12 months ago, said LSL Property Services. 

At 1.8%, the West Midlands saw the biggest increase, followed by the South West with a rise of 1.5%. London, where rents have only fallen once in the past 13 months, saw a rise of 0.8%.

Rents, however, also fell in four regions, with the biggest declines seen in the East of England and Wales.

LSL Property Services said this is the first time it has recorded a rent rise in January.

'The depth of the underlying demand sustained a higher level of competition for rental property during the Christmas period, preventing more severe falls in rents than we’d normally see during the period,' said David Brown, commercial director of LSL Property Services.

Looking forward, Brown said he expects the increasing dependency on rental accommodation to push rents up further over the long term. 

The average yield stayed steady at 5.3%, and is expected to remain strong, though with property prices weakening in January total annual returns dipped to 2.6%.

Tenant arrears, meanwhile, also remained high, with 10.7% of all rent in January – some £300.3 million – paid late or not at all.

Last week figures from Countrywide showed a record rise in the number of new tenants in 2011, up 24% compared with 2010. The letting agent warned that a shortage of supply could cause rents to soar throughout 2012.