Average rents outside London have increased by 5% over the year to August to reach £790 per month, marking the highest annual jump since Zoopla began recording the data 13 years ago.
Including London, average rents increased by 2.1% across the UK in the year to August, reaching £943 a month.
London rents dragged down the UK average, falling by 3.8% over the year to £1,593, but the pace of annual decline has slowed from February when rents were down 9.8% year on year.
However, when London is taken out of the equation, UK rents grew at their fastest rate since 2008.
Zoopla says that the widening gap between demand and supply is behind the rent increases.
In the year to date, rental demand is up 19% compared to last year, while the total stock of rental property is down 13%.
It says this is typically a busy period of year as students start university, graduates begin new jobs and families relocate for the new school term.
But this August is particularly so, with demand levels up nearly 80% on 2017-2019 averages, as pent-up activity from earlier in the year returns.
Zoopla says the total stock of homes available to rent is around 30% lower compared to normal levels for this time of year.
For those in employment affordability is holding up, as average pay has increased by 8.8% over the year, according to the Office for National Statistics (ONS), meaning it is outpacing rental growth.
Yet the ONS has warned that the earnings data has been affected by Covid trends, most notably the loss of lower-paid jobs, which may be pushing up the figures.
Rental growth hit its highest level for a decade in the East Midlands (+6.8%), the North East (+6.5%), the South West (+7.6%), Wales (+6.4%) and Yorkshire & the Humber (+4.9%).
In some towns and cities growth was even stronger at more than 10% in Wigan and Mansfield, and more than 9% in Hastings, Blackburn, Barnsley and Norwich.
Zoopla points out that what unites all of these locations is that they remain some of the most affordable places to rent, with the proportion of income needed for a single earner to pay monthly rent below the UK average of 32%.
Rental growth has returned to positive territory in major cities like Manchester, Birmingham, Leeds and Edinburgh.
Zoopla head of research Gráinne Gilmore says: “The rental data illustrates how city life is resuming – with a sharp increase in demand in central cities.
“The strong levels of rental demand seen across the UK during August will moderate in line with seasonal trends, but overall demand for rental property is likely to remain higher than usual in the coming months, amid this swing back to city life.
“As ever, much will be dependent on the extent to which the current rules around Covid continue as they are.
“But given no deviation from the current landscape, the demand for rental property, coupled with lower levels of supply, will continue to put upward pressure on rents.
“In London, this will translate into rental growth returning to positive territory late 2021 or early 2022.”
Strutt & Parker head of regional residential agency Kate Eales says: “The recovery in the rental market has, in many ways, mirrored the boom in the sales market, with people looking for homes that accommodate a different set of needs shaped by their lockdown experience.
“Lack of stock and high demand are inevitably driving price growth.
“This stock depletion is a result in part of many accidental landlords having now sold their properties – benefiting from the soaring demand in the sales market.
“Stock is also being absorbed by those who are renting tactically, making them as procedable as possible when their perfect property comes to market – a trend particularly prevalent amongst London leavers.”
