Asking rents in Great Britain are rising at the fastest rate ever recorded, according to Rightmove’s Quarterly Rental Trends Tracker.

Average asking rents hit annual growth of 9.9% to reach £1,068 per calendar month (pcm) outside of London, the highest annual jump on record, recovering from the slowdown in rental growth in the months immediately after the pandemic started.

This rapid growth in average asking rents, driven by high tenant demand and low numbers of rental properties available, means that rising rents are outpacing house price increases in all regions, with the exception of the East Midlands, South West and South East.

Wales (+12.7%), the North West (+12.5%) and the South West (+11%) lead the way in annual asking rent growth, while London hit record annual growth of 10.9%, with asking rents in the capital now 3% higher than before the pandemic started – the first time they have risen beyond pre-pandemic levels.

Pontypool in Monmouthshire, Wales, saw the largest annual increase in asking rent of any local area, jumping 20% from £562 pcm to £674 pcm, followed by Ascot (+18.8%), and Littlehampton (+17.5%).

The data also reveals that rents in London are now higher than before the pandemic started, as the capital’s popularity returned and landlords were able to negotiate higher rents for the new year.

Inner London rents also grew at a record 16.2%, recovering from its drop of 14% at the beginning of 2021, to also rise just ahead of pre-pandemic levels for the first time.

Reflecting on the recovery in the capital, Richard Davies, head of lettings at Chestertons, said: “London’s rental market has been witnessing a flurry of activity over the past year. During the peak of the pandemic, we saw many renters seeking a new home at a better price or with outside space which led to increased enquiries for areas outside of central London such as Barnes, Richmond and Kew.

“As 2021 unfolded, the market registered a gradual return of corporate tenants, international students and professionals who considered a partial return to the office and therefore required a property closer to central London. We have seen this demand continue throughout the usually quieter month of December and predict activity levels to remain very high for at least the first quarter of 2022.”

Overall, the supply-demand imbalance is supporting asking rent rises and has led to competition between tenants for the rental properties available nearly doubling (+94%) compared to the same period last year.

Total rental demand is up by 32% compared to this time last year, while the number of available rental properties is 51% lower. This has led to available rental properties being snapped up by tenants in just over two weeks (17 days) on average.

However, the number of available rental properties is 7% higher than the same period in December, a sign of availability improving at the start of the year.

Flats have seen the highest increase in competition compared to last year (+132%), followed by terraced houses (+40%) and semi-detached homes (+30%).

In terms of rental returns, Rightmove reports that the average yield across Great Britain is 5.5%, which is the highest yield since 2016 when it was 5.6%. The North East and Wales have hit record yields, while yields in London, South West and Yorkshire are at their highest since 2015. Yields in the East of England and South East are at their highest since 2016.