Areas around London are now seeing large rent rises instead of the city itself, according to the latest England & Wales Buy to Let Index from Your Move.
The South East and the East of England regions were among the fastest growing areas in the last 12 months, the report said.
While London is still home to the highest rents, it was one of only two areas to see prices fall in the year to February 2017.
The pressure in the London rental market has continued to slow this month as rents edged downwards in February.
The average rental property in the capital let for £1,280 during February 2017, 1% lower than the same point a year ago. This gure was also 0.5% down on January’s total of £1,286.
London was the only region surveyed to see rents fall on both a monthly and yearly basis.
Your Move said this suggests renters in the city have reached an affordability ceiling and are now looking outside the capital for properties. The counties surrounding London have seen rents increase rapidly over the last year as people move to these areas instead.
Rents in the East of England grew by 5.6% in the last 12 months to reach £868, although they did drop back 0.2% between January and February. In the South East the typical rent increased 3.4% year-on-year, with a 0.1% rise month-on-month. The average property in this region now lets for £878 a month.
However, it was in Wales where the fastest rising rents were to be found. The typical rental property increased in price by 7.7% in the year to February, although Wales remains one of the cheapest places to rent in this survey at £593 a month.
The North East (£545 a month) and Yorkshire and Humber (£566) were the only regions with cheaper rents than Wales.
Finally, London was not the only area to see rents fall year-on-on year. In the South West prices went down 1.5% during the past 12 months to hit £662. Areas in the south have a surplus supply of property for tenants which can cause rents to fall as landlords lower rates to suit the market.
Valerie Bannister, lettings director at Your Move, said: “The dramatic rent increases in London have now slowed as people look outside the capital in order to meet their housing aspirations.
“Areas in the South East and East of England have traditionally offered much better value than the capital and this has tempted many Londoners to look further afield for rental properties.
“Renters in London could be reaching the limits of their affordability as prices dropped back 1% in the last year. This will be one to watch as the year progresses.
“Away from the capital, Wales saw the strongest outright performance. Rents across Wales increased by 7.7% in the last year, more than anywhere else in the UK.”