Private tenants are paying an average rent of £921 a month for their buy to let homes.

The amount is up 1.5% on rents charged a year ago.

Renters in London are paying much more, having seen a year-on-year increase of 4.7% to £1,596 a month, says market monitor and tenant referencing agency Homelet.

Taking rents in the capital out of the picture, rents for the rest of the UK only increased by 0.7% in the year to December, averaging £763 a month.

Rents dropped in three regions – the North East (-4.6%), Wales (-1.7%) and the East of England (-1.4%).

Outside London, the most growth was in the East Midlands (+2.9%).

Martin Totty, chief executive at HomeLet, said:

“This year we’ve seen stability in UK rental price growth, with increases broadly in line with inflation. For landlords, there remains a sustained demand for property, with the private rental sector continuing to provide the market with both flexible and long term housing options.

“Average rental values in the capital rose by over 4% in the latter stages of the year. We would expect this to continue in London if demand for property outweighs supply.”

Looking ahead, he is worried increased tax and regulation could change the market.

“Private landlords will play a key role in the wider UK housing market. While the outlook for property investors remains positive, one of the concerns in 2019 would be a potential lack of supply in certain regions,” said Totty.

“The government squeeze on private landlords via taxation changes and more regulation could discourage their participation in this important sector. Unlike the trends in 2018, any reduction in supply could lead to rental increases that are above the rate of inflation.”

The data contrasts with figures issued by the Office for National Statistics, which flagged a 0.9% in UK buy to let rents in the year to November 2017.

The report showed no change in London, a 2.7% increase in the East Midlands and a 0.4% rise in the North East.