Typical rents in England and Wales reached £789 in June after increasing by 5.6% year-on-year and 1.4% month-on-month.

Adrian Gill, director of estate agents Reeds Rains and Your Move, attributed rising rents to growing wage packets and a stronger economy, although he warned tenants that things might get worse in the months ahead. He said: “We mustn’t lose sight of the driving force behind rent increases – the mismatch of supply and demand. Expanding our housing stock needs to become a national priority.

“If anything, competition for homes is only going to get more intense over time. The fierceness of housing competition needs to be met with an equal dedication to homebuilding. There may be new factors on the horizon too. In the wake of the summer budget’s reduced assistance for landlords, we might see many aiming to pass additional costs onto their tenants.”

As rents rose more tenants struggled, as the proportion of renters in arrears climbed to 8.7% from 7.6% the month before and 7.8% in June last year.

June 2015 was the first month since July 2013 when annual rent growth outstripped house prices, as prices rose by 4.5% in the 12 months to June.