There has been a 10% fall in the number of tenants aged under 30 signing new rental contracts.

Countrywide says this is because more have moved into home ownership, thanks to Help to Buy. It also reflects a 50% increase in mortgage lending to first-time buyers.

Average UK monthly rents have increased 4.6% year-on-year and prospects for future growth in rents look strong, says Countrywide.

The group, which has analysed its portfolio of 65,000 rental properties throughout the UK, says that particularly in London and the south-east, “significant upward pressure on rents” is due to lack of house building.

Rents have risen annually in all areas apart from the midlands, where Countrywide has recorded a drop of 1.6%.

In central London, the average rent is £2,520, compared with £1,148 in the south-east, £858 in the east of England, £762 in the south-west, £631 in the midlands and £623 in the north.

In Scotland, the average rent is £659 and in Wales, £648.

Nick Dunning, group commercial director of Countrywide, said: “The recovery in mortgage availability, the Government Help to Buy scheme and improving sentiment in the housing market has seen a wave of tenants move into home ownership.

“This flow of tenants out of the sector saw demand for rental properties in many areas ease, resulting in below inflation rental growth in some areas in 2013.

“With changing conditions in the sales market meaning that many of those tenants looking and able to buy have already made their move, rental growth looks set to accelerate.

“Over the medium to longer term a lack of supply will increasingly put landlords in a stronger position to ask for, and achieve, higher rents. Significant upward pressure on rents will come from a lack of house building, particularly in London, the south-east and other major conurbations with sound fundamentals experiencing population growth.

“Equally, any move by the Bank of England to raise interest rates will serve to push up mortgage costs, making it harder for those with smaller deposits, in particular, to get on the housing ladder.

“The single best way to alleviate upward pressure on rents is to build more affordable new homes, both for rental and for sale.”