Landlords across the country have cut rents in a bid to keep their properties tenanted through the winter.

Figures from the most recent buy-to-let index compiled by LSL Property Services show that December 2012 saw rents fall to a level last seen in August last year.

Across England and Wales, rents fell by 0.9%, bringing the average down to £734 a month.

The average rate was still higher than that seen in December 2011 by 3.2%.

LSL director David Brown explained the figures do not show an about-turn in the market but simply a seasonal blip.

He pointed out that tenants had strong bargaining power because landlords would reduce rents to avoid having empty properties in the winter, when fewer tenants were looking to move.

As 2013 goes on the underlying weakness in the mortgage market will boost rental competition again, said Brown.

“Long-term problems remain for new buyers looking to leave the rental market, and Funding for Lending is proving a double-edged sword,” he said.

“While rates are coming down for those with large deposits, extremely low saving rates are hitting those still trying to pull together a deposit – a problem accentuated by the record low base rate.”

Of the 10 regions monitored by the index, seven saw rent decreases in December 2012. The East and North East saw falls of 1.7%, the largest across England and Wales. In London, rents fell by 1.5% and in the South East they fell by 1.3%.

Some areas saw growth – the West Midlands at 1.3%, the South West at 0.9% and Wales at 0.4%.

Rents are still higher than a year ago for eight regions, with London seeing the highest 12-month rise, followed by the South East. The East Midlands and Wales are seeing lower rents than a year ago.

Annual yields on rental properties average £9,986, with £7,835 coming from the rental income and £2,150 from capital gains.

Assuming the trend for last quarter continues, investors in England and Wales can expect a total annual return of 4.3% in 2013.