A lack of supply means that landlords are able to keep raising prices. The number of available property listings is increasing, up 8pc in June compared to the start of the year, but supply was still down by more than a quarter compared to 2021, according to Rightmove.
Rental demand, by contrast, was up to 6pc, meaning competition among tenants is fierce.
Tenant demand rose most sharply in Wales in June, followed by London and the South East, according to an industry survey by the Royal Institution of Chartered Surveyors, a professional body.
Anthony Filice, of Kelvin Francis letting agents in Cardiff, said: “[The imbalance of] demand is greatly exacerbated by more buy-to-let landlords selling up and exiting the market. This, together with the threat of regulations, is making remaining landlords very choosy about who they let to. There is marked upward pressure on rents.”
Agents forecast continued rent price rises over the next three months, with the fastest growth in Scotland, the South East and the West Midlands.
Simon Rubinsohn, of Rics, warned of steep continued rent growth in the midst of the worsening cost of living crisis and blamed Government policy, such as a failure to build affordable homes and the buy-to-let crackdown, for the supply crunch.
“A combination of a lack of social housing development allied to more onerous changes in the private lettings market is exacerbating the imbalance between demand and supply,” Mr Rubinsohn said.
Rightmove revised its forecast of 5pc growth in asking rents by the end of the year up to 8pc.
Tim Bannister, of the website, said: “The wide gap that has been created between supply and demand over the last two years will take time to narrow. Until then, this imbalance will continue to support asking rent growth.”
Average monthly rental payments are now 40pc higher than they were 10 years ago.