Rents were up 1.4% in August, the third consecutive monthly increase and the fastest growth since July 2008.

This is according to the latest Rental Index from LSL Property Services, which owns the UK’s largest lettings agent network, including national chains Your Move and Reeds Rains.

Between June and the end of August, UK rents rose at an annualised pace of 8.2%, far outstripping inflation. The average UK rent is now £661, up from the February low point but still 4% below the peak of August 2008.

Rents rose in every region except Yorkshire and the Humber and the East Midlands.

Over the last three months, house prices have recovered by 2.9%, equivalent to an annualised increase of 12.3%. Yields have slipped fractionally from their peak of 5.1% in April to just under 5.0% in August, but remain well above the 4.2% low point reached at the end of 2007 before house prices began to fall sharply.

David Brown, commercial director of LSL property services said: “Sharply lower supply of rental housing