The cost of renting rose for the ninth consecutive month to almost £700 per month in October, new figures have revealed.
The cost of renting a home rose by 0.4% to £691 last month, up slightly from the September high of £689, according to LSL Property Services.
This has pushed annual inflation in the average UK rent up to 4.5%.
If inflation continues at its current pace, the average rent will hit a staggering £722 per calendar month by this time next year.
In another boost for landlords, figures showed that tenant arrears fell for the second month in a row in October, sitting just 0.1% above the lowest figure on record.
"Rents have been creeping upwards, month in, month out for the last year, and now stand just a few pounds shy of £700 per month," commented David Brown, commercial director of LSL Property Services.
"The recent increases are likely to steady slightly in run up to Christmas – traditionally a slower time for the market. But a strong underlying growth will remain, as the key market dynamics are geared towards further rises."
With tenant demand rising, the cost of renting is likely to continue on its upward course.
"Constrained mortgage finance is choking off the number of first-timers able to get on the ladder, and would-be landlords' ability to buy investment properties. With rising demand outpacing the increase in supply, rents can only go one way," said Mr Brown.
Rental increases were highest in the South East and North East, where they rose by 1.2% and 1.0% respectively. Yorkshire and the Humber was the only area in the whole of the UK to record a drop in prices, with a fall of 1.4% recorded.
The rise in rents alongside steadying house price inflation means that an investor buying a property now could expect a total annual return of 8.1%, the equivalent of £13,799
"Returns are dipping as annual house price growth slows, but it is a great time for landlords to invest.
"Tenant demand continues to lift rents, yields have remained strong, and the severe cuts to social housing will ensure that demand continues to rise and bolster rents for the foreseeable future."
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