Tenant arrears dropped significantly in October as rents rose for the ninth consecutive month, the latest buy-to-let Index from LSL Property Services shows.
UK rents rose by 0.4% to £691 per month – surpassing September’s record high of £689.
The average yield remained stable at 4.9% in October, as steady rent rises were matched by modest growth in the prices of rental properties.
David Brown, commercial director of LSL Property Services, says: “Rents have been creeping upwards, month in, month out for the last year, and now stand just a few pounds shy of £700 per month.
“The recent increases are likely to steady slightly in run up to Christmas – traditionally a slower time for the market.
“But a strong underlying growth will remain, as the key market dynamics are geared towards further rises.
“Constrained mortgage finance is choking off the number of first-timers able to get on the ladder, and would-be landlords’ ability to buy investment properties. With rising demand outpacing the increase in supply, rents can only go one way.”
Rents rose across the whole of the UK – except in Yorkshire and the Humber, where they fell by 1.4%.
The growth was most pronounced in the South East, where rents rose by 1.2%, and the North East, where rents increased by 1%.
Tenant finances were in better shape as landlords saw tenant arrears drop for the second consecutive month.
Unpaid rent totalled £221m across the UK in October, down from £229.3m in the previous month.
With just 9.3% of all UK rent unpaid during the month, it hovered just 0.1% above its best performance on record.