Rents across the country are rising at their fastest pace in a year. The average monthly rent in England and Wales rose by 1.2% to £713 in August, surpassing the previous record high of £705, according to LSL Property Services' Buy-to-Let Index.
With annual rent inflation now sitting at 4% the average tenant is paying £27 more a month than they were in August 2010. Rents have risen across England and Wales with only tenants in the Yorkshire and Humber area seeing a fall, and the drop was just 0.5%.
The rises come as a result of a large increase in demand for rented properties. Government figures show that one in six homes is now rented, a rise of 1% since 2009. The increased demand is coming from frustrated first-time buyers who are struggling to raise the large deposits needed to secure a mortgage deal.
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200,000 more people have moved into rental accommodation over the past year, says Jonathan Moore, director of rental property website easyroommate.co.uk.
"Lenders' unrealistic deposit requirements, combined with hefty house prices, have left the private rented sector groaning under the strain of demand from frustrated first-time buyers," he warns.
Unsurprisingly, it is Londoners who are facing the sharpest rental increases. Rents in the capital rose by 12.2% over the past year, according to tenant referencing specialist HomeLet. Over the same period salaries across London rose by an average of just 2.4%. Despite having their budgets stretched, more than half of London's renters are trying to save up to buy a property, reports furniture rental specialist Roomservice.