Rents on new tenancies rose across most parts of the UK over the three months to January, led by gains in the South East of England and the East Midlands, but growth continued to slow in the capital, new figures show.

Fresh data from the latest HomeLet Rental Index reveals that rent prices for new tenancies in Greater London increased by 6.2 per cent in the three months to January 2016 compared to the corresponding period in 2015, marking the slowest rate of growth seen in Greater London since March 2014.

“It’s notable that there has been a further fall in the rate at which average rents in the Greater London area are rising. In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London,” said Martin Totty (left), Barbon Insurance Group’s Chief Executive Officer.

In contrast, rent prices in other regions continue to increase steadily with the South East of England and the East Midlands witnessing the highest rent price rises in the three months to January 2016, at 7.2 per cent and 6.8 per cent respectively.

In Greater London the average rent on new tenancies for the three months to January 2016 was £1,510 per month, while the average for the rest of the UK, excluding Greater London, was £740 per month.

Of the 12 regions monitored across the UK, only North West of London saw prices fall, down 3.4 per cent year-on-year to an average of £646 per month.

Totty added, “The fact that UK-wide average rents in the private rented sector continue to show sustained upwards growth reflects there is still strong demand for rental properties, driven mainly by the impact of the long term structural imbalance in supply and demand of property.

“Landlords achieving higher average rents over time also suggests that tenants starting a new tenancy are proving they can afford higher average rents – with demand outstripping supply, some would-be tenants may be able to outbid rivals for properties, which could drive higher rents.”

Meanwhile, PayProp, an automated rental transaction processing system, which is affiliated with NAEA, ARLA, ICBA, NAVA and APIP, is set to launch in the UK over the next few days.

With a handful of UK agents already onboard, including Lime Properties in Hull, Abby Lettings in Sunderland, Holmes, the Property People in Shropshire, and Clarke Holland in the South of England, the company hopes to attract plenty more clients through its automated online payment tool.

Headed up in the UK by Shawn Brown (right) and internationally by Tom Samodol, PayProp is designed to support the lettings industry with simple-to-use technologies that automate the entire property transaction life cycle. This ranges from payments and reconciliation to statements and invoicing.

Brown said, “We are very excited to be launching PayProp in the UK at such a buoyant time in the rental market. The private rental sector alone is set to grow from 18 per cent to 35 per cent by 2032, and PayProp can provide further upside by transforming the way property managers work. It allows them to be cost efficient and industry compliant, balancing simplicity with power, trusted security with anytime, anywhere access on any device, and rapid functional response with no IT infrastructure costs.”

Also in the news today, 8.7 million Zoopla Property Group shares have been sold by Countrywide, representing a 2.1 per cent stake in Zoopla, for 220 pence per share.