The average monthly rent paid by tenants for residential property in the UK has reached a two-year high, according to new figures from Countrywide.

Its latest lettings index showed that there was a 1.4 per cent rise last month to an average of £866 per calendar month, with yields also remaining strong in July with an average of 6.1 per cent.

The greatest rent increase was witnessed in four-plus bedroom properties, with tenants being asked to pay 3.8 per cent more month-on-month. The average stood at £1,471 per calendar month, despite a 5.5 per cent fall year-on-year.

Rent on two-bed properties went up by one per cent to £787 per calendar month, while there was a rise of 0.9 per cent for three-bed abodes.

Nick Dunning, group commercial director at Countrywide, said that the index reveals the cost of renting continues to be "higher in relation to the cost of monthly mortgage payments".

"However, despite more competitive buy to let mortgages encouraging investors to expand their lettings portfolios and increase the supply of rental accommodation on the market, we have on average four to five tenants for every rental property we are marketing.

"Rental values are being underpinned by the increasing number of people living in the private rented sector and rents are likely to continue rising unless supply and demand becomes more aligned," he explained.

When it comes to geographical differences, the east of England experienced the greatest increase in monthly rents thanks to a 5.2 per cent month-on-month rise, followed by Wales (five per cent) and the South East (4.3 per cent).

There were falls recorded in central and greater London and Scotland, with the UK capital seeing the largest decrease of 2.8 per cent.

Rent arrears were also on the low, with these falling in all regions year-on-year apart from in Scotland and central London.