Buy-to-let enjoys double-digit rental growth

The rental market is still booming with rents rising by 10.5% over the last year, although the rate of growth has slowed.

The average tenancy charged a rent of £992 per month in the three months to August, according to the HomeLet Rental Index.

Yet rent rises have moderated across the UK, slowing in every region over the last quarter compared to the previous three months.

The trend is particularly marked in areas where rents have been rising exceptionally quickly this year, notably the South East of England and East Anglia.

The average UK rent on new tenancies has increased 1.6% in the three months to August 2015, compared to an increase of 2.2% for the three months to July and June 2015.

Nevertheless, rent prices remain significantly higher than a year ago.

With the exception of Wales, where rents rose by 2.5%, no region saw rents increase by more than 2%.

Rents fell in the South East, North West and North East of England.

The biggest fall was in the North East, where rents paid for new tenancies in the three months to August 2015 were, on average, 2.1% lower than in the three months to July.

Martin Totty, chief executive officer of the Barbon Insurance Group, which owns HomeLet, said: “Rents continue to run slightly ahead of house prices, with the majority of the UK still experiencing rising rents, albeit at a much slower pace than we saw in the early part of 2015.

“On an annualised basis, however, rents in most regions are still significantly higher than the same period a year ago.

“Broadly we are continuing to see a robust rental market with rent prices continuing to rise.”