A new index to measure the private rental sector has revealed that demand for rental properties is at an all-time high.
The data comes from Rightmove which also reveals that the best area for growth in demand has been seen in the East of England.
Demand for rental homes there has grown by 64% in just two years, according to the first quarterly Rental Trends Tracker.
The index has monitored nearly a quarter of a million property rents over the past two years and found that rents have risen by 4.2% in the last year.
Landlords with properties in Bushey and Stevenage in Hertfordshire saw the best rent rises of 21% and 13% respectively.
Rent increases for landlords
Landords with properties in Battersea saw the biggest rent increases in London where rents rose by 14%.
Across much of London, says Rightmove, much of the rental market has 'plateaued'.
A spokeswoman for lettings firm Strutt and Parker said:
“Rents are rising at a subdued rate than elsewhere for a number of reasons.
“There's now more stock than last summer and rents are plateauing as tenants are in the driving seat.”
The spokeswoman added that tenants are also opting to sign contracts for longer, up to two and three years and agreeing to rent increases of between 3% and 5% for each year in their contract.
Londoners moving to the suburbs to rent
The index has also revealed that Londoners are moving to the suburbs of the capital in the hunt for cheaper rental properties.
In turn, this increasing demand has pushed up rents by 4.4% in the south-east while rents the south-west rose by 3%.
The average for rents in London every month is now running at £2,052 which is nearly double that being asked in the next most expensive region.
London rents rise as property sales fall
Meanwhile, residential lettings firm Benham & Reeves says that rents in London are surging by between 2% and 4% in the past quarter with central London fuelling the rise.
Parts of Chelsea and Kensington recorded rent increases of more than 7%, on average, while Bow and Bethnal Green saw rents rise by 11%.
Not all landlords enjoyed rent rises, some areas saw rents fall including Notting Hill where rents fell by 1.5% and in Vauxhall and Battersea where they dropped by just under 1%.
A spokesman for the firm said that people are choosing to rent rather than buy property in London, for a variety of reasons including a rise in stamp duty.
He added that the change in stamp duty to 12% is effectively a 'gift horse' for most landlords with property in the capital who have seen rent increases stagnating in recent months.
