The cost of rent rose in January as the rental market bounced back, data from the latest Buy-to-Let Index from LSL Property Services plc shows.

An increase in January of 0.1% to £712 per month for the average cost of rent in England and Wales was the first time that LSL had seen a January increase in rental costs since it began compiling the index, and it was also the first increase in three months. As a result there was an increase of 0.3% for annual rental inflation in December to 4.3% which represents an increase of £30 for the average monthly rent for the past year.

The West Midlands and South West witnessed the fastest monthly increase of rent with increase of 1.8% and 1.5% respectively. London witnessed an increase of 0.8% and only saw a drop in rent once in the past 13 months. However, rent did fall in four regions across the UK with the East of England and Wales seeing the biggest declines of 1.7% and 1.5% respectively.

Over the course of the previous 12 months rent has increased in all region of England and Wales but one, with London seeing the largest annual increase of 6.3%, followed by he East of England with an increase of 5.9%. The North East propped up the list with a fall in rent of 0.7%, although the rate of annual decline slowed from 1.3% in December.

David Brown, Commercial Director of LSL Property Services said:

“The rental market burst back into life unseasonably early in January, with tenants on the move trying to take advantage of what is usually a quieter period for the rental market. The depth of the underlying demand sustained a higher level of competition for rental property during the Christmas period, preventing more severe falls in rents than we’d normally see during the period. 

“In January, activity has already moved up a gear in many parts of the UK, pushing rents up once more in a small, but significant rise. 

“Mortgage lending has shown signs of improving in recent months, but transactions remain at almost half their historic levels, and the increasing dependency on rental accommodation will drive further rent rises over the long-term.”  

Tags: buy-to-let index, LSL property services, rental cost, rental market