Tenants have paid down rent arrears despite a new record for monthly rents in October, according to the latest Buy-to-Let Index from the Your Move and Reeds Rains.

Residential rents across England and Wales now average £770 per month, or £12 more than October last year. Annual rent rises were 1.5% in the twelve months to October 2014. This follows faster average rent rises of 1.9% in the previous twelve months ending October 2013, and rental growth of as much as 3.4% over the preceding year.

On a monthly basis, rents in October 2014 rose 0.3%, or just £2 compared to the previous month of September 2014. Slower rent rises have coincided with healthier tenant finances, with rent arrears approaching all-time lows.

David Newnes, director at Reeds Rains and Your Move, comments: “Rents have edged to a new record and the rental market is pulsing with new demand. Yet at the same time, tenants are getting on top of their finances – helped by a cooling pace of such rent rises.

“Better affordability is good for tenants in the longer run too – and for landlords who can rely on steady revenue to pay the bills. That helps to support a virtuous cycle of only gradual rent rises.”