The average rent on residential property in the UK rose by 1% in June according to the latest LSL Buy-to-Let Index.

David Brown, commercial director of LSL Property Services plc, said: “Rents have continued their upwards trajectory, and are just a few pounds away from their peak levels in 2008. Although landlords weren’t clobbered as badly as feared, it is possible that some left the market in the run-up to the budget, and concerns over the new capital gains tax rate dampened the number of new investors entering the market in June. The restricted availability of buy-to-let mortgage finance has been the underlying factor holding back investment in the sector and limiting new rental properties hitting the market.”

London continued to lead the surge in June, with the average achieved rent in London rising by 1.9% to £942 per month. Landlords in the North also had reason for cheer as rents rose in both the North west and North east - by 1.4% and 1.3% respectively. However the West midlands bucked the national trend, recording a drop of 1.7%.

Brown continued: “London rents have climbed for five consecutive months, and there is no sign of a slowdown. There is an acute lack of affordable housing in London, and would-be buyers cannot afford the rising house prices – or get big enough mortgages. The increasing reliance on rental accommodation in the capital, combined with the constraints in its supply is pushing up rents faster here than anywhere else in the UK.”

LSL BTL Index


Rents
June 2010


Change in One month


Change over 12 months


Yields June 2010


Yields June 2009

London


£942


1.9%


2.3%


4.8%


5.1%

East of England


£732


0.6%


5.9%


4.7%


4.9%

South West


£627


0.0%


5.5%


3.7%


4.1%

Yorkshire and The Humber


£504


0.0%


0.5%


5.9%


6.0%

North West


£549


1.4%


3.1%


6.2%


6.3%

Wales


£530


0.2%


4.5%


4.0%


4.1%

South East


£679


1.2%


2.9%


4.5%


4.7%

North East


£489


1.3%


1.9%


4.4%


4.6%

West Midlands


£531


-1.7%


2.8%


5.4%


5.6%

East Midlands


£517


1.1%


3.9%


5.7%


5.8%

England & Wales


£673


1.0%


3.2%


4.9%


5.0%