A gauge of U.K. residential rents fell for a second month in January as more property investors entered the buy-to-let market, pushing up supply, LSL Property Services Plc said.
The average monthly rent for a home in England and Wales fell 0.3 percent to 682 pounds ($1,102) from December, the lowest average since July, the Newcastle, England-based company said in an e-mailed statement today. From a year earlier, it was up 4 percent.
While rents rose last year as prospective homebuyers were put off purchases as banks curbed mortgages and the government’s budget squeeze undermined confidence, lending to landlords is now increasing, bolstering the number of properties for rent, LSL said. The number of buy-to-let loans rose 6 percent in the fourth quarter, according to the Council of Mortgage Lenders.
“The recent loosening in the buy-to-let mortgage market has boosted the supply of rental homes on the market, a crucial factor in the temporary drop in rents,” David Newnes, estate agency managing director of LSL, said in the statement. “There are signs that this trend is continuing into 2011.”
The decline in rents in December and January may also be partly caused by landlords cutting asking prices during the slower holiday season to avoid properties being empty, Newnes said.
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org