Rents slow for second month

Rents have declined for the second consecutive month, according to the latest buy-to-let index from LSL Property Services.

Rents fell by 0.6% in November, taking rents back to the levels seen at the end of August, reveals the group, which owns Your Move, Reeds Rains and Halifax. This follows four months of rapid rental inflation during the summer when rents rose at an annual pace of 13%.

Half of the country’s regions saw declines, but rents fell fastest in the South East, down 3.3% in the month. Only the Midlands and the East of England experienced increases in November.

Landlords saw yields slip to 4.9% in November, a level last seen in November 2008, though they were 0.3% lower when adjusted for void periods.

Nevertheless, investors who bought property a year ago have made a total return of 4.1%, which is the best annual total return on LSL’s record, which begins with property purchased in June 2007. The group’s index shows that in November, a typical rental property made £809 in capital gains and earned £665 in rental income, totalling £1,474.

Arrears worsened in November, with 525,000 tenants having not paid their rent on time, up from an unusually low 495,000 in October. Collectively, tenants owed £261m in overdue rent last month.

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