Annual rental inflation on new lets halved in 2016 and reached the lowest rate of growth in seven years, according to Countrywide figures.

The agent’s December Lettings Index showed new rents grew by 1.6% last year, down from the 3.1% registered in 2015 to an average of £927 per month.

Average rents in London ended the year 2.9% down year-on-year to £1,246.

The average size of rental on existing tenancies was unchanged at 2.1% to £875.

Countrywide said rents had been pushed down by increasing supply.

Over the year the average number of available rental properties increased by 12% across the country, while there were 6% more tenants.

Johnny Morris, research director at Countrywide, said: “As the number of homes available to rent has grown, landlords have had to work harder to attract tenants. The average time to let spiked in April and has remained resolutely high ever since.

“Landlords are increasingly tempting sitting tenants to renew contracts with the promise of unchanged or even lower rents.

“Rental growth will likely increase in 2017. Squeezed yields, fewer tax breaks and higher stamp duty rates are likely to deter landlords from expanding their portfolios. Fewer homes on the market will leave tenants with less choice and negotiating power.”

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