The cost of renting a home has risen for the sixth month in a row to a new record high of £741 a month.
The new data for September released by LSL Property Services reveals a further 1.1 per cent increase in the cost of renting in England and Wales.
This means there has been a 3.2 per cent increase in the past 12 months.
LSL said that the increases were due to increased demand as first-time buyers are finding it increasingly difficult to get their foot on the property ladder.
It is expected that the Bank of England’s Funding for Lending Scheme (FLS) will help to increase the availability of mortgages for first-time buyers through cheaper mortgages that require a smaller deposit.
David Brown, commercial director of LSL Property Services, said: “Rents have risen consecutively for half a year as tenant demand strengthens on the back of a historically subdued mortgage market.
“However, every pound monthly rents go up by is another pound that renters can’t save for a deposit for their first home. This is lengthening their stay in rented accommodation, and increasing competition in the private rented sector.”
Extra demand has come from graduates looking to rent accommodation after securing new jobs.
Rents increased across seven different regions. London and the south-east saw the biggest increases of 1.9 per cent and 1.7 per cent respectively.
These two regions have seen annual increases of 6.2 per cent and four per cent. The average rental cost in London is now £1,092 per month.
Only three regions saw the cost of renting fall in September. They were the East of England, Yorkshire & the Humber and the West Midlands.