Rental prices continue to track upwards

Property rent inflation in the UK has reached an 18-month high, according to official figures that show tenants face average annual increases of 2.1 per cent.

Having fallen as low as 1.4 per cent last summer, the rate of private rental price growth has continued to track upward on the back of resurgent demand in London.

Figures from the Office for National Statistics reveal that rent inflation in the capital - where rent growth has far outpaced the national average since the recession - stood at 3.2 per cent in March, up from 2.1 per cent last December.

John Goodall, chief executive of lender Landbay, said the increase reflects an imbalance between demand and supply of housing for tenants. "Accelerating rent rises show that we desperately need more investment in homes to let."

In contrast to London, where prices are 17 per cent higher than in January 2011, private rents in many parts of the UK have barely risen.

In four regions - north east England, north west England, Yorkshire and the Humber, and Wales - rental prices have only risen by a total of 3 per cent over the past four years.

Annual rental price inflation stood below 1 per cent in each of these areas last month, and is as low as 0.4 per cent in the Northeast.

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