Rents have increased by an average of 3.1 per cent year-on-year across the UK as a whole, according to the HomeLet Rental index.
The index found that rent in the UK now stands at £913 a month, compared to £885 in August 2015.
The pace of rent increases, however, is moderating. The 3.1 per cent recorded in August is comparable to annual increases of between 3.5 and 3.8 per cent over the previous four months.
By contrast, annual rental inflation was running at close to 6 per cent this time last year.
The August 2016 HomeLet Rental index revealed that rents continued to increase in almost every area of the country, with 11 out of the 12 regions surveyed recording an increase over the year to the end of August.
Martin Totty, Barbon Insurance Group’s chief executive officer, said: “The latest HomeLet Rental index reflects a private rental market in which landlords are engaged in a delicate balancing act: they’re acutely aware of tenants’ concerns about affordability while also conscious of the need to achieve their target yields against a backdrop of rising costs.
“August’s figures suggest that rents are continuing to rise at a sustainable pace – ahead of price inflation, but well below house price increases, which were running at close to 6 per cent according to the most recent data.”
Mr Totty explained how in the medium to longer term, the fundamental driver of rents would be the balance between demand and supply for rented property.
He said: “We expect demand in the private rental sector to continue to grow, in line with demographic changes such as population growth, and as affordability concerns remain in the house purchase market, so it is important that we see efforts to support supply.”
Darren Pike, a mortgage adviser at Clear Cut FP, said: “It is important to remember there is no such thing as a ‘safe’ investment, and due diligence and risk acknowledgment is key to any successful investment.
“The buy-to-let market still serves its investment purpose regardless of the recent negativity.
“Buy-to-let investments are all about managing your entry and exit to fit your personal overall financial objectives, such as long-term returns, using the investment to boost your future pension, or as a legacy for your children’s future.
“Property is still a comprehensible venture, so long as you are equipped for market changes along the way.”