Rents in the East of England have seen the sharpest fall over the last 12 months, with a 3.6 per cent drop taking them to around £718.

In Wales, rents have fallen by 1.5 per cent over the last year to reach £551 a month on average.

London landlords are seeing more than double the average returns across the country amid surging property values and a continued shortage of homes to choose from, a lettings network has reported.

LSL Property Services, which owns chains Your Move and Reeds Rains, said the capital’s landlords have seen annual returns of over £38,000 typically over the 12 months to January, made up of income from rents as well as the rising value of rental property in London.

Across England and Wales, the average return for landlords over the last year has been £14,767, with the North East recording the lowest average return at £7,271.

LSL predicts that if current trends continue, landlords could expect to make an average return of around £22,256 per property over the next 12 months, helped by rising rental property values and smaller periods when properties are standing empty between tenancies.

David Newnes, director of Your Move and Reeds Rains, said that demand remains strong in the rental sector despite signs that more people have been getting on the property ladder in recent months.