Latest figures from the Office of National Statistics show that the rental market in South East England is outperforming London, reports OPP Today.

The statistics, which are not seasonally-adjusted, show returns in the South East rose 3.5% in the year to September 2016, while those in London fell by 0.8%.

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Across the country, rents in England rose by an average of 2.5% year-on-year, the same rate as reported in August, according to the index of private housing rental prices (IPHRP). Rents in Wales rose by 0.1% in the same period, while in Scotland there was a 0.1% fall, which all amounts to a 2.3% rise across Britain.

All other regions in England showed rises in rental returns across the period. The ONS says, “continued inflation in the rental market is likely to have been caused by demand in the market outpacing supply.”

Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year-on-year.

The IPHRP is an experimental price index tracking the prices paid for renting property from private landlords in Great Britain.

Meanwhile the latest data from the Association of Residential Letting Agents (ARLA) shows the number of prospective UK tenants has hit an 18-month high and supply has risen. In September 2016, letting agents had 40 prospective tenants registered on average per branch, the highest number since February last year, the Private Rented Sector Report states.

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Demand in the East of England and London was higher than the national average, with 45 prospective tenants registered per branch. The lowest demand is in Northern Ireland.

Report also found that the supply of rental property rose in September, while the average number of tenants negotiating rent reductions fell to its lowest level this year at 24%. Tenants stay in a property for an average of 18 months, and landlords endure an average three weeks of void period between tenancies. Properties are viewed an average of five times before a let is agreed.

David Cox, Managing Director of ARLA, says the findings paint a positive picture for renters.

“Although demand is rising, we’ve seen this happen gradually over the course of the year, and would expect it to slow again in line with seasonal trends over the next few months.”