Standard rent in England and Wales has now reached £682 per month, but this figure is still 4% higher than a year ago.
David Brown, estate agency managing director at LSL Property Services, attributes the decline to the recent loosening of the buy-to-let mortgage market, which has boosted the supply of rental homes.
He says: “With more products coming onto the market, there are signs that this trend is continuing into 2011, allowing a growing number of professional landlords to get onto the market – or broaden their portfolios – and take advantage of near record rental income and strong tenant demand.”
Brown believes the fall in rents is only temporary, adding: “Although rents have fallen, the strength of the rental market cushioned the additional impact of winter. Fewer tenants tend to move in December and January – and many landlords drop rents to avoid experiencing vacant properties.
“Despite the seasonal downturn and the increase in supply, there remains healthy demand for property and rents are still £26 pcm higher than last January.”
The index also showed the average yield fell slightly to 4.9% last month, while unpaid and late rent dropped from 11.7% to 11%.