The amount of rent paid by tenants in England and Wales reached an all-time high of £761 a month in August, with landlords expected to make a return of 17.2% in the year ahead.
The average rents figure eclipses the previous record of £758 set in October 2013, according to the research from lettings networks Your Move and Reeds Rains. The monthly rise of 1.1% takes the annual increase in rents to 2.4% – or £15.
Looking across the regions, rents in the South West saw the biggest upswing, rising by 3.5% year-on-year. The South East was just behind at 3.4%, with the North West at 3.3%. London was pushed into fourth place with an annual increase 3%.
Rents didn't rise everywhere, however. In the North East they fell by 1.6% over the year, in the West Midlands by 0.4% and in Wales by 0.1%.
The value of landlords' investments in terms of the average yield on a typical property dipped in August on an annual basis by 0.2 percentage points to 5.1%. However, they improved slightly from the 5% seen in July.
Total annual returns on rental property stood at 12.7% on average over the year to August, up 6.4% year-on-year.
The lettings network said: "In absolute terms this means the average landlord in England and Wales has seen a return, before deductions such as mortgage payments and maintenance, of £21,239 in the last 12 months. This is made up of rental income of £8,233 and an average capital gain of £13,006."
It added: "Looking ahead, if rental property prices continue to rise at the same pace as over the last three months, the average buy-to-let investor in England and Wales could expect to make a total annual return of 17.2% over the next year, equivalent to £30,997 per property."
Cocktail of opportunities
David Brown, commercial director of LSL Property Services, added: "Landlords have benefited from higher property prices, which is helping portfolios to expand and more homes become available to let. Gross rental yields are still in line with long-run averages, and rental income is more reliable as personal finances gradually leave the great recession behind them.
"Meanwhile, the threat of interest rate rises is being held off by economies in the rest of the world marching to a slower tune. Landlords are seizing this cocktail of opportunities. And most critically – when landlords boost profits by adding to the supply of homes, this keeps rent rises lower, and helps pass some of the benefits of these factors onto tenants."
Meanwhile, the proportion of rent that was paid late increased to 8% in August, up from 7.3% in July. Over the year, the rise in tenant arrears was far less severe at just 0.2 percentage points.