Average yields dropped by 0.1% in May – decreasing in all regions apart from the East of England where they have increased 0.2% to 6.2% and Scotland by 0.1% to 5.8%.
Nick Dunning, group commercial director at Countrywide, said: “Despite the decrease in yields in May rental yields remain strong and are providing attractive returns for buy-to-let investors compared to other types of investment.”
Two and three bedroom properties saw the greatest increase in average monthly rent with a 0.5% and 0.3% month-on-month increase to £770pcm and £884pcm respectively.
The average monthly rent for one bedroom properties was £674pcm, a decrease of 0.6% on April, and for four plus bedroom properties it was £1,363pcm, a decrease of 2.1% on April.
Dunning said: “The fall in average monthly rents for four plus bedroom properties reflects consumers decisions to source cheaper properties to rent to try to keep living costs down thus demand is higher for smaller rather than larger rental properties.
“This is particularly true for first-time buyers who are saving for a deposit to buy their first home. However the summer is traditionally a busy time for the lettings market as demand for rental accommodation picks up with many prospective tenants wanting to move in and be settled by September.
“Whilst in May supply for rental properties and demand was more balanced the average monthly rents are likely to rise over the summer months as demand increases during this period.”
Wales has seen the greatest increase in average monthly rent, up 4.9% on April 2013, followed by Scotland (up 2.2%), the North (up 1%) and South West (up 0.5%).
Despite some regional increases the average monthly rent in England, Scotland and Wales fell 0.2% in May which is the first month it has fallen since January 2013 but rents are still 0.8% higher year-on-year.
The Midlands has seen the greatest decrease in average monthly rents down 1.4% month-on-month followed by South East and Central London both down 1.3%.
Scotland has the lowest average monthly rent at £617pcm and Central London the highest at £2340pcm.
Meanwhile rent arrears remained the same or fell year-on-year in all regions apart from Scotland and the East of England.
In Scotland they increased 4.6% and in East of England they increased 0.1%. In terms of property sizes the level of rent arrears fell for all property sizes, with three and four plus bedroom properties seeing the greatest decreases at 1.2% and 1% respectively.
