Rental market bounces back as supply sinks

Following two months of declining rents over the festive period and New Year, rents increased 1.2% in February according to the FindaProperty.com Rental Index.

Long term landlords and buy-to-let investors who have held onto their properties during the downturn will be relieved to see the fortunes of the rental market reversing, as 'accidental landlords' return to the sales market. The resulting reduction in stocks is pushing up asking rents as tenants compete for the remaining properties.

The average UK asking rent now stands at £814pcm, £10 higher than last month’s low of £804pcm. However rents remain 1.9% lower than a year ago (£830pcm). The increase in rental values can largely be attributed to tightening supply, with the number of rental properties available on the market declining 3.6% in February, to the lowest level since November 2008.

Ten of the eleven UK regions experienced a monthly increase in asking rents in February, while rents in the South West remained stable at £797pcm. The northern regions recorded the highest increases, with rents in the North East rising 5.5% to £619pcm, followed by Scotland (2.5%) and the North West (2.3%).

Nigel Lewis, property expert at FindaProperty.com, comments:

"Landlords have been hunkering down over the past year and a half as – on average – rents and property values have dropped. But it looks like the wintery economic conditions may be easing now as accidental landlords exit buy-to-let, so the market is no longer awash with a surplus of property to rent. If this tightening in supply continues landlords may enjoy a further recovery in rents over the course of the year."