Average monthly rents increased by 1.9% from £789 in June to £804 in July.
They have now risen by 6.8% year-on-year from July 2014, when average rents were £753.
Adrian Gill, director of estate agents Reeds Rains and Your Move, said: “Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear. We’re seeing rent rises manage to hit record-breaking speeds on both monthly and yearly timeframes as far back as our data can go.
“But rents are just a small part of the larger economic machine. The fact that they’re purring along at higher-than-ever speeds is a sign that the rest of the economy is picking up. An engine can’t use fuel it doesn’t have. These rent rises are a reflection of heavier wage packets being fed back into economy now that the rust from the recession has been cleaned off the cogs.
“But just because a car can break speed limits doesn’t mean it should. We’re faced with a real problem – homes have become a scarce commodity. As house prices and mortgage deposits continue to eat up a larger and larger proportion of wages, appetite for rental properties has begun to outstrip the available stock. This has driven rents up even faster than house prices.
He added: “A clear and concerted effort towards new-build properties is the most sensible way to address this issue. It boils down to supply and demand. However, it’s not the only possible response.
“The government could also ensure that we’re making the most efficient use of our small supply of homes – for instance by doing more to make it easier for people to downsize their properties when they want to.”
Four of the 10 regions of England and Wales saw record rent peaks in July – London, Yorkshire & the Humber, and the East and West Midlands – while every region saw increases compared to last year.
The West Midlands saw rents rise 3.6% over the 12 months to July 2015, bringing the average rent in the region up to £583.
It’s a similar story in the East Midlands, with a 2.5% annual increase carrying rents up to £584.
Yorkshire & the Humber recorded a 2.0% year-on-year increase to £582 on average, although the region only saw a modest 0.3% increase.
Only two regions saw falling rents on a monthly basis: a 0.1% month-on-month drop in Wales and the East of England.
