Although average income from residential sources on ‘All Estates’ increased by 5.5% to £80 per acre (£198 per ha) and represented 40% of gross income, the growth in average residential rents per dwelling was small:

• Average annual rental income of Assured Shorthold Tenancies (AST) on ‘All Estates’ increased slightly by 0.4% during 2012 to £8,355 per dwelling.

• Average regulated rents on ‘All Estates’ increased by 0.8% to £4,800 per dwelling.

It is surprising, given the strong rental demand that average residential rents have not increased more. However, as noted above in the agricultural sector this suggests restructuring activity in 2012 with reversions to ASTs from agricultural tenancies and other housing stock.

These may be smaller properties at lower rents or may not yet be contributing a full years rent, hence diluting the average to record very little average growth per dwelling during 2012.

This restructuring is confirmed by an increase in the proportion of ASTs: 55% of all properties in 2012 from 50% in 2011. Our survey also recorded a fall in the proportion of residential properties tied up in agricultural tenancies or in hand operations from 28% to 25%.

The average surplus for let residential property on ‘All Estates’ in 2012 was 31% (34% in 2011). ASTs recorded a higher surplus of 48%. Graph 7 illustrates how location affects AST rental levels with the South East of England recording the highest average AST rents at almost £11,400 per dwelling.