The growth in rental prices shows no sign of slowing down as latest figures from the ONS Index of Private Rental Prices for Q3 2015 reveal.
The index, which measures the change in price in renting residential property from private landlords, shows that rents in Great Britain rose 2.7% in the 12 months to September - the largest annual rise seen since late 2012.
A shortage of suitable properties, coupled with strong demand - both from people priced out of the housing market and those who prefer to rent - is the principle cause of these sustained rises, believes Steve Bolton, Founder of Platinum Property Partners
He comments: "ONS data shows that the rate of annual rent rises has increased every month this year, and this is unlikely to change in 2016 given that some landlords may be forced to put up rents in a response to increasing costs. A possible rise in interest rates will increase investors' mortgage costs and if introduced, the cap on mortgage interest tax relief could make many buy-to-let properties unprofitable.
"Rises in rental prices continue to outstrip increases in renters' earnings, and while some will be able to manage higher rents, landlords ought to focus on developing an effective investment strategy rather than passing costs on to tenants.
"Houses in Multiple Occupation (HMO) provide up to four times as much rental income as standard buy-to-let investments, which can limit the impact of rising costs. HMOs are also beneficial to tenants in that they provide affordable, quality accommodation: our research shows that the average HMO tenant pays £419 a month less in rent and bills than someone renting alone and can save for a deposit in almost half the time."
