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Rental market in England and Wales ended 2016 strongly, latest index shows

Despite a turbulent year average rents ended 2016 higher than they started it, the latest Your Move England & Wales Buy to Let Index has revealed.

The average property was let for £811 a month in December. By comparison, the average rent in January 2016 stood at £790.

Rents increased across most regions last year, with the East of England seeing rents rise faster than any other region.

As demand for properties in London has slowed, many people have looked outside of the capital for options, with the East of England seeing strong rent rises across the year (6.1%), followed closely by the South East where the typical rent has grown 4.4% since December 2015 to reach an average of £877 per month.

Just two areas saw average rents fall on a yearly basis in 2016. In the South West, homes now let for £660 per month, 1.4% lower than 12 months ago, while the North East saw a smaller fall with prices down 0.2% on the year.

The North East remains the cheapest place to rent in England and Wales, with the average property on the market for £543, while in spite of a marginal decline between November and December 2016, London remains home to the highest rents in England and Wales.

The typical property in the capital let for £1,291 in December, some £4 less than November’s total of £1,295, Your Move found.

Valerie Bannister, letting director at Your Move, commented: "The rental market in England and Wales has ended the year strongly, with all key indicators looking positive."

London was the only region to see a fall in rents month-on-month as the rest of the country was either flat or saw rises.

Rents in the East of England grew 0.7% compared to November – the best performing area. This was followed by the South West (0.6%) and the East Midlands (0.5%).

Unsurprisingly, London was the region which offered the lowest rental yields, with homes in the capital returning 3.3% on their investment during December.

In contrast, landlords in the North East continue to enjoy the strongest yields. Across this region the typical property returned 5.3% in December, the same as in both October and November

Across England and Wales the typical return was 4.7% in December, which is below the average yield of 5.1% recorded in December 2015, as well as the 5% recorded at the half way point in June 2016.

Bannister added: “Rents ended the year higher than they started in most areas, yet tenant arrears have remained broadly at the same level.”