Statistics from the LSL House Price index found annual rent rises have fallen to 0.6 per cent, less than half the latest rate of CPI inflation at 1.6 per cent.
David Brown, commercial director for LSL Property Services, said while this was good news for renters, with their wage growth offsetting any rise in rates, it could put more pressure on buy-to-let investors.
In absolute terms the average amount charged by property investors in England and Wales has risen by just £5 in the past 12 months, standing at £741 a month, compared with £734 in April 2013.
Despite the slowing rental income growth, there are still 10 hot-spots where buy-to-let investors are seeing better returns than in April 2013.
According to the data, the highest annual increase is in the South-West, with rents up 4.3 per cent since April 2013, while London, Wales and the South East have all seen meagre rent rises, up by just 0.6 per cent since April 2013.
Despite this, Mr Brown said schemes such as Funding for Lending had helped banks free up cash to support buy-to-let investors as they picked up properties across the UK
He said: “Improved mortgage lending is helping landlords to expand their portfolios in many areas of the country.
“And while every corner of England and Wales has its own local market, the overall trend is clear.”
Andy Frankish, new homes director for national mortgage adviser Mortgage Advice Bureau, said there was a lack of homes for buying or renting. “With increasing consumer demand likely to continue, it is now up to the construction market to respond by ramping up production of new homes,” he said. “Government data shows the number of new-builds started in 2013/14 was 133,650 – the highest in five years. However, there is still some way to go before we reach pre-recession levels.”