Rents across England and Wales have overtaken all previous records, according to the latest Buy to Let Index from LSL Property Services.

Average rents across England and Wales rose to £757 per month in August, after a monthly increase of 1.8%. On an annual basis, this leaves rents 2.1% higher than September a year ago.

Rents now stand at levels £13 per month higher than the previous all-time record, set in October 2012 when monthly rents averaged £744 across England and Wales.

Record Rents

Record rents also mirrored faster lettings activity. The number of new tenancies across England and Wales increased by 6.5% compared to August, taking the number of new lettings in September to levels 9.2% above those seen in September 2012.

Gross yields on a typical rental property rose to 5.4% in September, compared to 5.3% in August. Taking into account capital accumulation and void periods between tenants, total annual returns on an average rental property rose to 7.4% in September, compared to 6.1% in August. In absolute terms this represents an average return of £12,129, with rental income of £8,164 and capital gain of £3,965.

If rental property prices continue to rise at the same pace as over the last three months, the average buy to let investor in England and Wales could expect to make a total annual return of 13.6% over the next 12 months, equivalent to £23,028 per property.

Source: Financial Reporter