The average rent in the UK has increased by £115 per month since last year, reaching £1,051 per calendar month according to Zoopla.

A tenant now pays 34.4 per cent of the average income of a single earner.

The portal, in its latest lettings sector market snapshot, says rental growth has accelerated over the last 12 months – from less than two per cent in July 2021 to 12.3 per cent today.

There are early signs of a market plateauing – one such sign is a there has been a jump in demand for one and two-bed flats as renters feel the cost of living squeeze and fewer look for two and three-bed houses.

In the North West, Wales and London, the average rent for a two-bed flat is now more expensive than the average rent for a three-bed house.

With memories of the pandemic receding, rental growth in urban markets (at 10.5 per cent) is now outpacing that in rural markets (8.5 per cent) as strong employment growth drives demand in cities, reversing the trend seen during recent years.

The strongest performing urban markets are London (17.8 per cent); Manchester (15.5 per cent); Glasgow (14.4 per cent); and Bristol (12.9 per cent); whilst the North East is one of the most affordable areas in the UK to rent.

Zoopla says there is no real prospect of significantly improved rental supply in the near term as private landlords continue to sell off homes due to tax and regulatory changes and renters decide to stay in their current homes.

Renters renewing their tenancies will also amplify the fierce supply squeeze and keep upward pressure on rents into 2023.

There is headroom for some renters to pay more, especially outside London and the South East, however overall, the portal says it expects the headline rental growth to slowly taper over Q4 and into 2023. 

Zoopla executive director Richard Donnell says: “Rents have surged ahead over the last year but there are signs that the pace of growth is peaking and set to slow into 2023. 

“Renters are responding and looking for smaller, better value for money homes to rent with an eye on energy costs as much as rental levels. 

“What the rental market needs to combat these challenges is more new homes for rent. Greater regulation has seen less new investment and a small but growing number of landlords selling up, meaning the rental market has stopped growing since 2016. 

“There is a risk that more regulation to improve standards or potential new measures to dampen rental growth, as proposed in Scotland, may compound the supply problem which is pushing rents up in the first place. 

“Policymakers need to tread a careful path between protecting consumers and ensuring a decent supply of homes for rent.”