Average rent stabilises

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by Gill Montia

Smartlandlord.co.uk has some reassuring news for landlords contained in its latest buy-to-let index.

The website claims that average monthly rent stabilised in May remaining at April’s figure of £765.

According to the firm, excess supply due to reluctant landlords has helped push rents down almost 10% in the past year but the balance of power is now shifting, with demand for rented accommodation currently high.

The firm points out that this is peak time for graduates with guaranteed jobs to start looking for accommodation and a favourite time of year for home movers to relocate.

However, the average yield fell from 5.1% to 5% in May, as house prices nudged upwards slightly.

The South East bucked the trend with yields in the region rising in May; areas with good transport links are proving particularly popular with tenants.

Tenants saw average Income fall 1% from April to May, impacting on affordability, and the proportion of tenants classified as unemployed rose in May to 7.8%.

Smartlandlord warns that socio economic factors could outweigh supply and demand issues and cause rents to fall again after their seasonal Spring peak.

Despite the risks inherent in the economic downturn, the firm sees the long-term outlook for the private rented sector as strong and recommends that landlords looking to expand their portfolios act now but ensure they are protected against short-term risk.