Average UK private rents rose by 3.7% to £1,393 a month in the year to July, according to provisional figures from the Office for National Statistics (ONS).
The annual increase accelerated from 3.3% in June, suggesting that pressure on tenants intensified during the month.
Average rents in England reached £1,451 after rising by 3.8% over the year. Wales recorded the strongest increase among the three nations covered by the July figures, with rents climbing by 4.5% to £843, while Scotland experienced growth of 1.7% to £1,016.
Figures for Northern Ireland, which cover the 12 months to May, showed that average rents increased by 2.3% to £875.
There were significant regional differences within England. The North East recorded the highest annual rental inflation at 6.3%, while the South East had the lowest rate at 2.9%.
Nathan Emerson, chief executive of Propertymark, said: “Although rental prices continue to increase, the overall rate of rental inflation has slowed over the past 12 months.
“However, with an average of seven people registering their interest in each available property at many letting agency branches, there remains intense pressure on the supply of suitable rental homes.
“Across all nations, there is a continued need for substantial long-term investment in housing to keep pace with real-world demand, particularly as the population continues to grow.
“However, for rental stock levels to increase, many factors must work in harmony to help deliver sustainable new homes in the regions where they are needed and at the right time.”
Alex Upton, managing director of specialist mortgages and bridging finance at Hampshire Trust Bank, said: “Competition for good-quality rental property remains intense, which helps explain why rents continue to rise.
“The latest Propertymark report found letting agents have an average of just 12 properties per branch, compared with 98 prospective tenants.
“That is a significant imbalance, and in many areas good rental properties simply do not stay available for long.”
Upton said landlords had become more selective about potential acquisitions after a succession of regulatory changes.
She added: “That shift towards more considered, professional investment is positive, but it cannot make up for a shortage of rental homes. That means creating the conditions in which landlords have the confidence to keep investing while standards continue to rise across the sector.
“Unless we address supply as well as standards, renters will continue to compete for too few homes and affordability will remain under pressure.”
