Average rent now a whopping £700 a month

Model house with coins

The average rent has reached a staggering £701 a month in England and Wales, according to a new report.

Rents have gone up 4.1% in the past year and people are now paying an extra £28 a month, says LSL Property Services.

In June alone the amount renters paid shot up by 0.7%.

LSL says demand from renters is on the increase because many first-time buyers are unable to afford to buy their first home so are being forced to stay in the rental market.

At the same time people are hampered from buying because there is a real shortage of affordable housing for first-time buyers in the UK.

Geographically, rent in London has risen faster than in any other region in England and Wales and tenants in the capital paid out an average of £1,006 a month in June - an annual increase of 6.9%.

The second biggest rises were seen in the North East and West Midlands, with rents rising 5.1% and 4.6% respectively.

Only three regions saw rent fall - the East Midlands, the South East and Yorkshire & Humber.

David Brown, commercial director at LSL, says:

"Tenant demand continues to reach ever-higher peaks - and there simply isn't enough rental property coming onto the market to match it.

"Despite several new deals on the market, securing a big enough mortgage remains a tall order for the average buyer. The climbing cost of living and renting is impacting how much renters can save for their deposit, and demand will remain high in the short term."

The number of tenants failing to pay their rent has fallen from 11.5% to 9.3% and tenants arrears dropped by 18%.