Rents across England and Wales increased by 2.2% year on year in December, ending the year higher than they started in most areas, the latest buy to let index shows.
They increased the most in the East of England and the South East but in London they ended 2016 just £10 per month higher than at the start of the year, according to the data from the Your Move index.
The average rent was £811 in England and Wales during December with the highest in London at £1,291, followed by the South East at £877, the East of England at £864 and the South West at £660.
The lowest average rent was in the North East at £543, followed by Yorkshire and Humber at £564, Wales at £584, the West Midlands £606, the North East £618 and the East Midlands £633.
On a regional basis, most areas saw rents rise or stay broadly flat compared to the previous 12 months with only the South West and the North East seeing a year on year fall and London was the only region to see a fall in rents month on month.
The index report suggests that as demand for properties in London has slowed, many people have looked outside of the capital for options and this could explain the strong rises of 4.6% in the South East and 6.1% in the East of England.
The East Midlands also recorded strong annual growth of 5.5% while in Wales rents were up 4.9% year on year. The South West and the North East recorded annual falls of 1.4% and 0.2% respectively.
‘The rental market in England and Wales ended the year strongly with all key indicators looking positive. Rents ended the year higher than they started in most areas, yet tenant arrears have remained broadly at the same level. Average yields have remained stable across the country, with some regions continuing to offer well above average returns to investors,’ said Valerie Bannister, Your Move lettings director.
The strong yields returned to property investors and landlords also demonstrate the resilience of the current market, she explained. Across England and Wales the typical return was 4.7% in December but this was below the 5.1% recorded in December 2015, as well as the 5% recorded at the half way point in June 2016.
Landlords in the North East had the strongest yields in December 2016 at 5.3%, the same as in both October and November while it was 5.1% in the North West and 4.8% in Wales. Yields were smallest in London at 3.3%.