Rents paid by private sector tenants in Great Britain outside of London rose by 2.3% in the 12 months to December 2016, unchanged for the fifth month in a row, the latest figures from the Office of National Statistics show.
In England rents were up by 2.5%, in Wales they increased by 0.3% and in Scotland they were up by just 0.1%, according to the data published by the ONS.
All English regions saw growth in private rents year on year with the South and East outperforming the North while in London rents increased by 2.4%.
The report suggests that inflation in the rental market is likely to have been caused by demand in the market outpacing supply in many areas.
The index also shows that between January 2011 and December 2016, private rents increased by 14.1%, strongly driven by the growth in private rental prices within London. When London is excluded, private rental prices increased by 9.9% over the same period.
But Wales and Scotland have much slower growth rates. The annual rate of change for Wales has not reached 1% since March 2012 and rental growth in Scotland has gradually slowed to 0.1% from a high of 2.1% in the year to June 2015, some 0.8% lower than December 2015. This weaker growth may be due to stronger supply in Scotland.
But supply is unlikely to fall in the UK as a whole, according to Tarlochan Garcha, chief executive officer of property lending platform Kuflink, as people cannot afford to get on the housing ladder.
Garcha said: "Rental demand is soaring as homeownership continues to become a distant dream for many. A critical lack of supply is being outstripped by demand, especially in London where the average house price is fast approaching £500,000."
Demand is likely to rise in cities such as Manchester, Leeds and Newcastle following substantial government investment towards regeneration and improved transport links that are making these cities vital business hubs.
Garcha added: "Demand for rental accommodation from both students and graduates thanks to their flourishing universities could further contribute to rising rental prices in these areas."
