The average monthly rent for a house in England and Wales rose to £846 in July 2016, which is 5.2% higher than July 2015. Rents in London have fallen slightly.
The rental figures were published by the estate agents Your Move, and mentioned in a September 2016 article in The Guardian. Your Move says high demand and lack of supply is the main reason for the increases.
The largest increase is in South East England, which has seen a rise by 15% to an average monthly rent of £924. This rise occurred because many people have moved out of London due to the high rents in the capital. Though rents in London have fallen by 0.7% in the 12 months ending July 2016, they are still more expensive than the rest of the country.
The figures are good news for buy-to-let investors, who, despite increases in their costs due to the rise in stamp duty and tax relief cuts, are still purchasing property. As long as there is a high demand and limited supply of rental properties, investment opportunities remain.
Your Move surveyed landlords and found that 72% were likely to buy more properties. In some upmarket areas of London, rents have fallen by 4.1% over the 12 months ending July 2016.
Supply is exceeding demand in some parts of the capital. London estate agent Knight Frank has advised landlords to be more flexible when negotiating tenancy contracts.
There are many buy-to-let mortgages available at low interest rates to help landlords finance their investments, with a residential or commercial mortgage advisor able to help them unlock the best deals.