Average residential rents fell for a second successive month in December 2011, according to the latest Buy-to-Let Index from LSL Property Services plc, which owns the national lettings chains Your Move and Reeds Rains.

In December, the average rent in England and Wales fell by 0.8% to £711 per month. Despite the monthly fall, annual rental inflation increased to 4% from 3.5% in November, as tenant demand in December surpassed that of a year ago.

On a monthly basis, average rents fell in seven regions, with the biggest declines in the South East and North East, where they fell by 1.9% and 1.4% respectively. Rents in London fell for the first time since December 2010, with rents falling by 0.9%, compared to a drop of 2.3% a year ago.

In the last 12 months rents have risen in all but two regions, say LSL. The fastest rising rents on an annual basis were in London where rents rose by 5.6%. The next biggest increases were in the East and South East of England, with rents rising 5% in both regions. Rents fell in the North East and South West by 1.3% and 1.2% respectively.

According to David Brown, commercial director of LSL Property Services “The seasonal relief continued for tenants as rents dipped again in December, but the drop-off was much smaller than a year ago. The rental market was sheltered from the full impact of the seasonal lull by the strength of underlying tenant demand as many prospective renters took the opportunity to move in the run-up to Christmas at a time when the market is traditionally less competitive.

“With the mortgage market facing challenges from the eurozone crisis and the sluggish wider economy, credit conditions are unlikely to ease significantly in the coming year. As a result, the number of first-time buyers able to secure finance isn’t about to rocket up, and demand for the limited supply of rental accommodation will continue to rise. It won’t be long before rents will resume their upward march.”






Rents December


1 month change


Annual Change


Yields December 2011


Yields December 2010

London


£1,023


-0.9%


5.6%


5.1%


4.9%

East of England


£737


-0.9%


5.0%


4.8%


4.6%

South West


£629


-0.4%


-1.2%


3.8%


3.9%

Yorkshire and The Humber


£539


0.1%


3.9%


6.5%


6.2%

North West


£570


-0.7%


3.7%


6.9%


6.4%

Wales


£559


-1.2%


4.2%


4.4%


4.2%

South East


£727


-1.9%


5.0%


4.9%


4.7%

North East


£507


-1.4%


-1.3%


4.9%


4.7%

West Midlands


£562


1.0%


2.3%


5.8%


5.6%

East Midlands


£547


0.8%


3.8%


6.1%


5.7%

England & Wales


£711


-0.8%


4.0%


5.2%


5.0%