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Rents rise for third month in a row

Rents rose for the 10th consecutive month but growth is slowing in the run-up to Christmas, the latest buy-to-let Index from LSL Property Services.

In November, the average UK rent rose to £692 per month – squeaking ahead of October’s record high of £691.

But he growth of 0.1% represents the smallest increase since rents began to rise in February.

Recent rent increases seem to have ended in several parts of the country.

The east of England and the east midlands reported falls of 3.1% and 2.4% in November, whilst rents dropped by 1.9% in the south east and by 0.6% in the north west.

The marginal monthly national gain was largely driven by rents rising by 1.8% in London, where they hit £992 per month – an increase of 9.2% in the last year.

The average yield rose slightly to 5% in November, thanks to increasing rents, contrasting with a slight decline in the value of an average rental property.

David Brown, commercial director of LSL Property Services, says: “In the run-up to Christmas, we tend to see the rental market slowdown somewhat. Tenants prioritise Christmas spending over setting aside money for moving home. But with the limitations placed on the supply of rental property by the lack of mortgage finance, rents have continued to increase – even though the rental market’s peak season is behind us.

“Nevertheless, rent increases have begun to slow in several regions, and we expect this trend to continue across the country in December and January. However, the UK’s buy-to-let market still faces a shortage in the supply of rental properties and we don’t anticipate that the slowdown in rent rises will last long into 2011.”

But tenant arrears provided less positive news for landlords in November.

Tenant finances were in worse shape than October, with 9.7% of all UK rent unpaid, rising from 9.3% in the previous month.

Unpaid rent totalled £231m across the UK in November, up from £221m in the previous month.



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