Buy to let rents have hit new heights, according to Britain’s biggest letting agent, LSL Property Services.

Tenants are now paying an average rent of £698; the most ever recorded in LSL’s monthly rent index, passing the previous record high at the peak of the market in 2008.

The data comes from the firm’s letting agent arm that includes chains like Your Move and Reeds Rains.

David Brown, LSL commercial director, said: “Landlords have seen tenant demand continue to hit new heights. The mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder.”

“As a result, demand for rental accommodation is increasing, and supply is not rising enough to match it. This has turned the buy-to-let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”

London leads the way in charge for higher rents

London and the South East lead the rental performance charge. In September, landlords put up rents by 1.1% to £972 per month – a 6.8% rise since January 2010.

“There is an acute lack of affordable housing in London, and would-be buyers cannot meet higher house prices – or get big enough mortgages,” said Brown.

“With rental properties so sought after in the city, landlords have been able to continually hike rents since January. In the last twelve months, the average London landlord would have made an annual total return of nearly £34,000 on a typical rental property.”

A dissenting voice comes from the National Landlords Association (NLA), where chairman David Salusbury said: “Research has shown 58% of landlords did not increase their rent in the last 12 months and a further 12% decreased rents.

“The survey also found more than two-thirds of landlords have no plans to increase rents over the next three months.”

“The reality facing the sector is one of VAT increases, expected interest rate rises and a current lack of mortgage finance, all of which landlords have to cope with.”

According to LSL, the increase in rents contributed to give investors an annual return on investment £15,592 on a typical rental property (9.2%).