The South West of England was home to the fastest rising rents in the year to June, the Your Move England and Wales Rental Tracker found.
Prices in this region – which includes rural areas of Cornwall and Devon, plus the major city of Bristol – rose by 3.4% in the last year with the average rental price there now at £686.
Other regions to boast strong growth were the East Midlands and East of England. Prices in the East Midlands grew by 2.8% to hit £656 while in the East of England the average price is £890, following growth of 2% in the last 12 months.
Martyn Alderton, national lettings director at Your Move, said: “While the property market in London has cooled, the strong performance in other areas means landlords across England and Wales are enjoying good returns.
“Northern regions offer the highest percentage returns. The South West of England is home to the fastest rising rents as tenant demand continues. Plymouth is a particular hotspot.
“As well as stunning countryside and lower cost of living, current multi-million pound developments are creating employment opportunities. Coupled with the expansion of the dockyard and hospital, strong economic growth is encouraging many tenants to live here.
“Plymouth’s student market is also very active, as is demand for city centre apartments and houses of multiple occupation (HMOs).
“We are seeing many millennials preferring to rent here due to their lifestyle choices and the flexibility it brings compared to buying. Demand is therefore keeping rental and yield payments up as tenants are willing to pay provided the quality of the rental property is high.”
While the capital remains the most expensive place to rent in England and Wales, recent price increases appear to have reached a plateau. However other regions continue to perform well with the South West enjoying the strongest rental growth.
Across all regions, the average seasonally adjusted monthly rent now stands at £861. On a non-seasonally adjusted basis, the average property lets for £830 per month. Other regions outperform the capital.
The London rental market has continued to cool, with prices falling by 0.5% in the last 12 months. Prices in London dropped slightly in the last year, as the heat continues to dissipate from the capital’s property market.
The average rental property in London is now let for £1,271 per calendar month, down 0.5% compared to a year ago.
Two other regions also saw rents fall in the last 12 months. These were Wales – where the average property lets for £588, 1.9% less than a year ago – and the North East, where prices fell by 1.6% to £535.
The North East remains the cheapest place for tenants to rent a property in England and Wales and London continues to be divided depending on where a property is located.
On a monthly basis, the South West was also the region to see rents rise faster than anywhere else. Prices here grew by 0.6% between May and June. Northern regions offer highest yields
Landlords and property investors in northern areas continued to enjoy higher percentage returns than their counterparts in the south.
The North East once again delivered the biggest returns, with the average property offering a 5% return to landlords.
The North West also had similarly strong returns, offering yields of 4.8% in June. In Wales the typical yield was 4.6%. At the other end of the scale, the average return to London property investors was 3.2%.
Across all of England and Wales, landlords enjoyed an average yield of 4.4% in June. There was a small decline in the number of tenants in financial difficulty this month.
Some 9.1% of all tenancies were behind with their payments this month. This is lower than the 9.2% found in May and the 9.4% recorded in April.
Throughout 2018 the arrears rate has been close to 9%. Encouragingly, the proportion of tenants in arrears remains well below both the recent and all-time high recorded by Your Move.
The all-time high of 14.6% was recorded in February 2010 while the most recent high of 13.7% was found in July 2017.
