Business

Rents fell back again in March, say letting agents

Lettings boards
Image caption Rents will start to rise again soon, LSL says

The average level of private rents in England and Wales fell back slightly again in March, according to the letting agency group LSL.

Average rents dropped by 0.3%, or just £2, to £705 per month, after a drop of 0.6% in February.

But LSL said the recent drop-off would be short-lived, as it had been due to some first-time buyers moving out of their rented homes to beat the recent reintroduction of stamp duty.

Rents are still 2.7% up on a year ago.

"The rental market was still feeling the knock-on effect from the stamp duty deadline in March, with an increased number of tenants rushing to leave the sector in the first part of the year, easing tenant competition," said David Newnes of LSL.

"With the passing of the stamp duty deadline increasing the cost of moving, and banks' funding conditions likely to limit high value mortgage lending to first-time buyers, would-be buyers will be more reliant than ever on rented accommodation."

LSL runs letting agencies under names such as Reeds Rains and Your Move, and its index of rents is based on about 18,000 homes.

In March, rents fell most in south-west England and the East Midlands, and they also dropped slightly in London, where they were down by 0.3% during the month.

However, the capital has still experienced the fastest annual growth in rents of any region, up by 4.9% compared to March last year.