Rents in England and Wales have increased 11% annually as demand also rises with the pace of growth in London showing no signs of slowing, according to the latest rental index.

London tenant demand has increased at more than 11 times the rate of supply and overall demand is up 14% year on year while the supply has only increased by 7%, the Sequence national rent report shows.

It means that the average rent is now £784 but in London it is £1,468. Month on month this is a rise of 1% for the country as a whole but on the capital city rent growth slowed to 0% on a monthly basis.

But the pace of the London rental market shows no sign of slowing down with new agreed tenancies up 34% annually and in the rest of the UK there has been a 20% year on year increase in new tenancies.

‘Demand to rent across the country remains insatiable with the number of tenants seeking to rent up 14% annually in May and 5% on the month. This demand still isn’t being met by supply,’ said Stephen Nation, head of lettings for Sequence, which includes Barnard Marcus, William H Brown and Fox & Sons.

He pointed out that with new rental properties available down by 7% on last year, this means that monthly rents will continue their upward trajectory and in May rents were up 11% on May 2013.

‘The London market remains the most competitive across the UK and successful tenants need to move swiftly to secure a property. New agreed tenancies soared 34% annually in the Capital. Rental increases are more subdued than the national average, remaining flat on the month but up 7% annually. This is partly because we are seeing some new supply edging into the market,’ explained Nation.

‘Buy to let mortgages remain our most popular mortgage product but applications are subdued in May, down 9% annually and 4% on the month. This can be attributed to a number of factors including the initial knock on effect of MMR and some uncertainty around interest rate rises,’ he added.

The index report also shows that nationally tenant viewings are up 10% annually and 3% on the month in May, which shows that tenants are particularly active in their search for their ideal home.

New agreed tenancies are up 20% annually and 3% on the month. Due to the level of monthly growth being the same for these two market indicators, the ratio of tenant viewings to new tenancies agreed remains 7.6/1 in May when compared to April, but on an annual basis the ratio is down from 8.3/1 in May 2013. This shows that tenants recognise the need to move fast in this market.

London viewings soared 36% on the month and decreased marginally on the month by 3% and new agreed tenancies are up by 34% annually and 1% on the month. As a result of the monthly dip in viewings and growth in…