Results from the Countrywide Quarterly Lettings Index reveals a favourable lettings market for buy to let landlords.
Countrywide’s Quarterly Lettings Index, the largest national lettings index has uncovered a number of interesting statisics:
Average monthly rents in Inner London are the highest in the UK and four times more than in Scotland
Scotland has the cheapest rental accommodation in the UK and is the only region where arrears have increased
Average monthly rents increased the most in Wales and the East of England at 5.5%, followed by Outer London at 5.4%
Average UK rental yields of 6.2%, with Wales topping list at 6.7%
Rising rents, falling arrears and fast letting times provide perfect recipe for buy-to-let investors
Average rents have risen and rental payment arrears have fallen in Q1 2013 compared to the prior year, according to the Countrywide Quarterly Lettings Index.
The Countrywide Quarterly Lettings Index is based on over 50,000 properties across England, Scotland and Wales, and is the largest index of its kind. It analyses rents, arrears and yields.
All parts of the UK, except Scotland and the South East, experienced a rent increase from this time last year (Q1 2012), with average monthly rents increasing the most in Wales and the East of England in Q1 2013, both up 5.5% to £618 and £814 per month respectively. Outer London’s average monthly rents rose by 5.4% year-on-year to £1,107per month. The South East, on the other hand, experienced a decline with average rents falling -1.1% from the prior year to £1,054 per month. In Scotland average rents fell 2.6% to £580 per month, making it the cheapest rental accommodation in the UK.
The Countrywide Quarterly Lettings Index also shows that in the Midlands, average rents rose 1.8% to £636per month. The highest rates of average rents were in Inner London at £2,387 per month in Q1 2013, up 1.9% from Q4 2012 and 1.9% from the prior year.
The North and South West also experienced a year-on-year rise in average rents to £603 per month and £745 per month (up 2.7% and 2.3%) respectively, but fell from Q4 2012 (-1.9% and -0.2% respectively).
Scotland was also an anomaly in rental arrears. It was the only region in the UK to witness an increase in arrears outstanding more than 30 days in Q1 2013, up 2.6% from the prior year to 6.6% of rent roll.
All other parts of the UK experienced a drop in rental arrears outstanding more than 30 days in Q1 2013, with the South West having the lowest arrears at only 4.5% of rent roll, an improvement of 1.2% year-on-year and 0.3% from the prior quarter. Inner London had the highest arrears at 7.3% of rents due in the quarter, a fall of 0.1% from the prior year.
Commenting on the Index, Nick Dunning, Group Commercial Director at Countrywide plc, said:
“The Countrywide Quarterly Lettings Index has once again given us the most comprehensive insight into the rental market across the UK and has highlighted some revealing facts. It shows that the rental market continues to develop strongly with some interesting movement in market dynamics from London to the regions. The growing average monthly rents across the UK shows the increasing attractiveness of regions outside London. London remains a good place to buy property, but investors are venturing further afield for investment opportunities.
“Scotland is an anomaly to this – with falling rents and increased arrears being compounded by recent legislative changes, investors might be deterred from buy-to-let investment.”