Rental price growth has now fallen below the general rate of inflation, research shows.

HomeLet’s February Rental Index showed that new rents had risen 0.8% year-on-year, below the general inflation rate of 1.8% recorded in the same month.

The rental inflation figure is also well below the high of 4.7% recorded as recently as last June.

On a monthly basis rents were up 0.7% at £895 in February.

London still remains the area with the highest average rents on new tenancies, at £1,520, while the lowest was £596 in the East Midlands.

Additional research unveiled by HomeLet reveals that more than half of 3,726 landlords surveyed expect to have to raise rents in the face of mounting cost pressures.

However, 29% plan to defer this to 2018.

Martin Totty, chief executive of HomeLet, said: “In recent months we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay.

“With more than one in five landlords blaming an increase in their tax liability for raising rents, it remains to be seen if this can sustain.

“Landlords will hope the Chancellor does not make it harder for them to continue supporting their tenants in this way, with further changes to the tax system or legislation, as he prepares to unveil his Budget.”

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