Rents fall 0.6% in November
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Rents slipped back for a second month running, falling 0.6% in November to take average rents back to levels at the end of August.
The latest buy-to-let Index from LSL Property Services, which owns the UK’s largest lettings agent network, including national chains Your Move, Halifax, and Reeds Rains shows rents fell after four months of rapid rental inflation during the summer when rents rose at an annual pace of 13%.
Rents fell fastest in the south east, down 3.3% in the month. Half of the country’s regions saw declines, with only the midlands and east of England seeing increases in November.
With house prices having risen at twice the pace of rents over the last seven months, landlords saw yields slip to 4.9% in November, a level last seen in November 2008. Adjusted for void periods yields were 0.3% lower.
Nevertheless, as the worst of the house price falls in 2008 drop out of the figures, annual returns continue to improve. Investors buying property a year ago have made a total return of 4.1%, a combination of a small loss of 0.4% on lower house prices, and rental income adjusted for average void periods. This is the best annual total return on LSL’s record (which begins with property purchased in June 2007) and now far exceeds that available on regular deposit accounts for the first time since the credit crunch began.
In November, a typical rental property made £809 in capital gains and earned £665 in rental income, a total of £1,474.
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