Rents have risen at twice the annual rate of weekly earnings and the average rent in England and Wales now stands at a staggering £753 per month, according to new research.
The latest Buy-to-Let Index from LSL Property Services found rents have jumped 1.6% in the last year.
The research revealed average rents across England and Wales now stand at £753 per month as of November, up 1.6% compared to November 2012.
But wages have risen by just 0.8% on an annual basis. In addition, average regular pay before tax stands at £1,941 per month, according to the latest official data
Rents across England and Wales remain significantly higher than a year ago, despite a recent seasonal drop of 0.7% (or approximately £5) in the month since October 2013.
November also witnessed annual growth in lettings activity. The number of new tenancies agreed across England and Wales increased by 1.5% compared to November 2012. This was despite a slowdown on a monthly basis, with 6.3% fewer new lettings than in October.
"Economic reality now resembles the most optimistic dreams of last year. But for so many households, the dream of homeownership is still relegated to the imagination," said David Brown, commercial director of LSL Property Services.
He added: "It's not just wages. Savings rates have been swamped by inflation for half a decade – so building up even a 5% deposit is a real struggle."
The study also found eight out of ten regions saw rents fall on a monthly basis between October and November, in line with a monthly fall across England and Wales as a whole.
The sharpest monthly drop was in the West Midlands, with rents down 2.6% since October. This was followed by a fall of 1.8% in the South East and a 1.3% monthly decrease in the East of England.
However, the South West experienced rent increases of 1.1% between October and November, while rents in Wales also rose slightly on a monthly basis, up by 0.2%.
On an annual basis, London saw the steepest rent rises – 4.4% higher than in November 2012. This was followed by a 3.4% annual increase in the South West, while rents in the South East are 3.2% higher than twelve months ago.
Meanwhile, rents in the East of England have fallen by 5.5% (or £42) over the last year.
This was followed by a 2.8% annual drop in the West Midlands, while rents in both the North East and Yorkshire and the Humber are 2.0% lower than November 2012, according to LSL.