Demand for rental homes is the highest it has ever been with the fastest increases seen in the East of England (at 64%) within the past two years.

The figures have come from Rightmove’s first quarterly Rental Trends Tracker, which looked at 249,357 asking rents of properties coming onto the market within the last two years.

Nationally rents have risen by 4.2% within this period, with the two highest growth areas being in Hertfordshire – Bushey (up 21%) and Stevenage (up 13%).

In London, rental prices have grown highest in Battersea (up 14%), which is unsurprising with the huge redevelopment of Nine Elms taking over the area. However, throughout the capital much of the market has plateaued.

London’s demand hotspots all have average asking rents much lower than the capital’s average, with the top three being Bexleyheath (£1,048) and Sidcup (£1,073), both in south east London, and Carshalton (£1,095) to the south west.

Strutt And Parker head of London lettings Zoe Rose said: “Rents are rising at a more subdued rate in the capital than the rest of the country for a number of reasons.

“In prime central London, there is more stock becoming available than last summer and rents are plateauing because tenants are very much in the driving seat.

“As people are also being accustomed to renting for longer periods, a lot of tenants are signing up for two or three years from the outset with rental increases of 3-5% per year written into their contracts.

“This keeps rental rises at a more sensible level as landlords are being asked to commit to longer term tenancies.

“Over the past few years, it’s been an intense market in the centre of London with rents in Zone 1 and Zone 2 gently creeping up prompting tenants to look further afield than traditional areas like Clapham, Fulham and Battersea to get good value.”