Private rental prices paid by tenants in the UK increased by 2% in the 12 months to January 2022 – representing the sharpest annual growth rate since February 2017.

This is the fastest pace of growth seen since February 2017, the data from the Office for National Statistics (ONS) shows, and means that, since January 2015, rents have shot up by 12.3%.

Excluding London, private rents increased by 3% year-on-year.

Rents in London have increased by just 0.1% annually, reflecting remote working trends as well as an increase in supply, the ONS said.

The East Midlands was identified as the region with the fastest rental growth in January, with gains of 3.6%.

Mike Hardie, head of inflation at the ONS, said: “UK rental prices accelerated at their fastest pace since 2017, with increases across every region in England, including London.”

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, believes that rents still offer room for growth.

She said: “Royal Institution of Chartered Surveyors research found that a slide in the number of properties for rent and another rise in tenant numbers is filling agents with confidence that rental prices will be on the march for months or even years. It expects rent rises to average 5% over the next five years.”

A report commissioned by the National Residential Landlords Association found that the UK needs almost 230,000 new private rented homes a year to meet government housing targets across the UK.

Tax incentives needed to encourage ‘significant additional investment’ in PRS