Annual rental inflation on new tenancies returned to growth for the first time in two months during July, referencing firm HomeLet claims.

The referencing firm says that rents on new tenancies increased by an average of 1.1% annually after two months of successive declines.

The average rent on a new tenancy now stands at £925 a month, up 1.9% on a monthly basis.

London continued to see annual drops, down 0.6% to £1,564. The south-east saw declines to £1,025, while the north-east dropped 1.7% to £526.

Martin Totty, chief executive of HomeLet, said: “It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs.

“This year, that ‘seasonal’ factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months.

“At the same stage last year, the south-east was the main driver of UK average rents. This time around it’s regions throughout the country leading the strengthening in rents.

“If we exclude the London region, the average UK rent for a private rental property has hit a new high of £769 a month, up 1.6% on this time last year.”