In London typical rents reached £1,560 per month compared to £724 outside London in the three months to October, an increase of 7.5% year-on-year compared to 3.5% in the rest of the UK.
Seven in 10 tenants (71%) would prefer to buy rather than rent, but two thirds (66%) saw saving a deposit as too big a barrier.
Martin Totty, Barbon Insurance Group’s chief executive, said: “Our survey showed that many tenants ultimately aspire to own their own home, but that just over half of them aren’t actively saving for a deposit yet.
“However, the positive news is that almost nine out of 10 tenants told us that they were happy with the standard of their current rented property; and the majority of tenants told us they were happy with the service provided by their landlord or letting agent.
“Whilst we are seeing upward pressure on the rental market it’s important that the sector continues to drive professional standards forwards for mutual benefit of tenants, landlords and letting agents.”
Annual rents didn’t increase everywhere in the UK, as they fell by 4.9% in the North West, 2.1% in Northern Ireland and 1.2% in East Anglia.
The biggest rent rise was seen in Scotland (9%), as renting in the three months to October 2015 now costs £665 north of the border.
