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Average UK rents rose for a second consecutive month in June according to Your Move, giving landlords some more hope as they look to manage their buy to let loans in this downturn.

The letting agent recorded a huge 11.3% fall between August 2008 and April 2009, in which average rents declined from £717 to £636 per month, but it says rent levels are now recovering. In June 2009, rents rose 0.3% to a UK average of £641 per month – having grown 0.5% in May.

Of course, rising rent comes after rising demand, and there is certainly more demand – overall, Right Move found the number of new tenants registering to rent soared 18% in the past year. More people are finding it impossible to get hold of mortgage credit, so have had to resort to renting.

David Newnes, managing director of Your Move, says: “Since last summer rents have been forced down by a huge increase in the supply of stock on the lettings market. This was largely a consequence of a surge in the number of accidental landlords unable to sell and making their homes available to rent. However, a rapid rise in demand from tenants in May and June has helped redress the balance and stopped the downward pressure on rents."

Rents in London have fallen more sharply than in almost any other region in the past year, down 7.1% since June 2008, but the capital is now recovering fastest. Average London rents rose 1.2% in June 2009 over May, rising from £857 to £868 per month. The biggest drop in rents was evident in the North West in June – down 3.2% compared to May, from £487 to £471 per month.

Newnes says: “Rents in London have plummeted since last summer as demand from tenants has been hit by redundancies and falling number of overseas workers coming to the capital. But the London rental market is resilient and rents are starting to rise again."

But Right Move warns that the recovery may not be as strong in the South West of the country, where rents have fallen fastest in the past twelve months. It says the region is home to a large number of second homes, more of which have made available for rent by homeowners looking to boost their incomes.

SOURCE: YourMove, 22/07/09

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