Business

Rental costs down by 0.8%, says LSL

Lettings boards
Image caption The cost of renting has risen over the last year, according to the survey

The cost of renting a home in England and Wales fell for the second month in a row in December, a survey has suggested.

The average rent fell by 0.8% in December compared with November, to £711 a month, according to LSL Property Services.

However, renting was 4% more expensive than the previous December, LSL said.

It added that the impact of Christmas spending had led to more tenants getting behind on rental payments.

LSL found that 10.7% of all rent was late or unpaid at the end of December, compared with 9.3% in November.

The Association of Residential Letting Agents (Arla) said these difficulties faced some landlords too.

"It is more critical than ever to take references and conduct thorough research before signing a tenancy agreement," said Tim Hyatt, president of Arla.

"Seeking advice from a professional, licensed letting agent is the best way to ensure tenants and landlords' rights are protected."

Regional picture

The monthly falls in rental costs in November and December came after 10 months of rises, and LSL has said that the seasonal decrease was shallower than a year earlier.

Image caption Christmas spending led to an increase in rent arrears, the survey concluded

"The rental market was sheltered from the full impact of the seasonal lull by the strength of underlying tenant demand as many prospective renters took the opportunity to move in the run-up to Christmas at a time when the market is traditionally less competitive," said David Newnes, director of LSL, which owns lettings agents including Your Move and Reeds Rains.

Rents fell in all regions except for Yorkshire and the Humber, the West Midlands and the East Midlands, the LSL survey shows.

Monthly rent fell for the first time for a year in London.

Annually, rents rose in all but two regions in December - the south-west of England, and the north-east of England.

"It may be premature to say the UK rental market has peaked and that we are about to see rents fall away," said Matt Hutchinson, director of flat and house share website Spareroom.co.uk.

"What we are probably seeing is a temporary blip, a natural cooling-off period for the rental market.

"The fact is the fundamentals have not changed. Demand is still significantly outstripping supply of new rental stock, and while December was a quieter month for the rental market, January and February are typically two of the busiest months.

"We would expect to see upward pressure on rents resume in early 2012."

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