London recorded the strongest monthly increase in average rents as demand continued to outstrip the supply of privately rented homes.

Average rents in the capital rose by 4.2% month on month, from £2,385 to £2,484, according to the latest regional rental market figures.

The representative annual salary needed to secure an average-priced rental home in London increased from £70,050 to £74,520, a rise of 6.4% year on year.

The North West recorded the second-largest monthly increase, with average rents climbing by 1.9% from £1,110 to £1,131. The representative salary required rose by 3.8% year on year, from £32,700 to £33,930.

“Rental markets continue to vary considerably.”

Kim Lidbury, president of ARLA Propertymark, said: “The latest figures show that rental markets continue to vary considerably regionally, with some experiencing further rent growth while others remain relatively stable or have seen modest monthly reductions.

“London continues to lead the market, recording the strongest monthly increase in rental prices, which has also driven a higher representative salary requirement for prospective tenants.

“Elsewhere, regions such as the North West and West Midlands also recorded rental growth, while Wales and parts of northern England saw rents ease slightly over the month.

“While it’s encouraging to see year-on-year rental growth moderating compared with the sharp increases seen in recent years, the underlying challenge remains unchanged.

“Demand for privately rented homes continues to significantly outstrip the supply available, meaning rents remain historically high despite slower rates of growth.

“Until more good quality homes are brought into the sector and policies to support investment by landlords, tenants are unlikely to see the meaningful reductions in rental costs that many are hoping for.”

REGIONAL TRENDS

Wales recorded the largest monthly fall, with average rents declining by 0.9% from £1,009 to £1,000. It was also one of the few regions where affordability improved year on year, as the representative salary required fell by 1.7% from £30,510 to £30,000.

Regional trends were mixed. Rents increased in the West Midlands by 1.7%, the South East by 0.8% and Scotland by 0.2%, in addition to the rises recorded in London and the North West.

Monthly rents declined by 1.1% in the East Midlands, 0.9% in the North East, 0.7% in the South West, 0.2% in the East of England and 0.1% in Yorkshire and Humberside.

The monthly report compares average agreed rental prices with the typical annual salaries required by referencing agencies for tenants to rent affordably across the regions.

AVERAGE ANNUAL SALARY NEEDED TO SECURE AVERAGE-PRICED HOME