Average rents in the UK increased by 2.4% during Q1 2013 compared to Q1 2012 whilst arrears fell, according to the latest Countrywide Quarterly Lettings Index.

All parts of the UK, except Scotland and the South East recorded a rental increases when compared to the year before, with average monthly rents increasing the most in Wales and the East of England during Q1 2013 - both up 5.5% to £618 and £814pm respectively.

Although Outer London’s average monthly rents went up 5.4% year-on-year to £1,107pm, rents in the wider South East declined, with average rents falling 1.1% from the prior year to £1,054pm. In Scotland average rents fell 2.6% to £580 per month, making it the cheapest rental accommodation in the UK.

Nick Dunning, Group Commercial Director at Countrywide plc, said: “The Index 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 so investors might be deterred from buy-to-let investment.”

All parts of the UK, with the exception of Scotland, experienced a fall 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.

Scotland saw an increase of 2.6% to 6.6% of rent roll in arrears outstanding more than 30 days in Q1 2013.

The survey showed that rising rents and stabilising house prices are making rental yields highly attractive with the average yield at 6.2%. The highest rental yield was in Wales at 6.7% closely followed by both the North and Midlands at 6.5%. The lowest rental yield was in Inner London at 4.6%.

Dunning said: “The growth in the residential lettings market appears to be taking hold. Rising rents, falling arrears and fast lettings due to high demand for rental accommodation is acting as the perfect recipe for investors and landlords. With attractive returns on offer, investors are returning to property as a long-term investment option over savings with meagre returns and shares with unpredictable volatility. The buy-to-let market is booming.”

The average time it took to let a property in the first quarter of 2013 was 14.5 days, which is marginally higher than last year when it was 15.1 days. At 13.4 days, properties in the South rented the fastest in Q1 2013; Scotland was the slowest region as it took on average 19.3 days to rent a property.