Rents now £1 away from highest ever level

Number of tenants up nearly 14% in last 12 months though 'reluctant landlords' figures are dropping

A two bedroom maisonette to rent in Westbrook Gardens, Margate, at £150 per week, on with New Space Margate.

The average rent in England and Wales stood at £743 per month in August, according to figures from LSL Property Services, after a monthly increase of 0.7%. It is the second highest level on record, £1 behind the high of October 2012.

Earlier today, The Archbishop of Canterbury, Justin Welby, warned about the danger of  'large-scale' rent arrears in a speech at the National Housing Federation conference in Birmingham.

The LSL figures reveal there were 13.7 per cenet more new tenants in August than in August 2012, with rents rising fastest in the South East where they were up 2 per cent.

However, the number of 'reluctant landlords' is falling, according to the Association of Residential Letting Agents (ARLA).

Over the past three months, ARLA member offices have reported a decrease from 26 per cent to 21 per cent in the proportion of rental property coming onto the market because it cannot be sold. This is a drop of 21 per cent on last year's figure. More than half of ARLA's members said there were more tenants than properties available.

Ian Potter, Managing Director, ARLA, said: "Much has been written recently about the recovery of the residential sales market and it would appear that these effects are now being felt in the private rented sector. While the departure of ‘accidental landlords’ from the sector will be a good thing for the individuals concerned, there is a real and ongoing worry about the level of rental properly supply across the country."

Meanwhile, research from Direct Line for Business suggests that there are 3.3 million people across the UK living in rented accommodation who are not listed on the tenancy agreement. Three quarters of these have been living in other people’s rented homes unofficially for more than six months.