A man stands on a balcony in a residential high rise block of flats in Notting Hill in central London
Housing costs for renters are rising twice as quickly as pay in England an Wales Reuters

Rents are rising twice as quickly as wages in England and Wales as the cost of living squeeze continues despite the economic recovery.

The average residential rent was £747 in June having risen by 1.4% across the year.

That is according to LSL Property Services in its monthly buy-to-let index for June.

Office for National Statistics (ONS) figures show that regular pay was growing at a rate of 0.7% in June.

But rents were rising more slowly than price inflation, which lifted 1.9% in the same month.

"If rents had kept up with inflation for the last twelve months, this summer would have seen the average rent break through £750 per month. And that hasn't happened," said David Newnes, director of estate agents Reeds Rains and Your Move, part of LSL Property Services.

"With housing costs making up such a big section of monthly budgets, it will be encouraging for many tenants that rents are going up more slowly than other household bills."

The UK economy is set to grow by 3% in 2014, according to Bank of England forecasts. But the strengthening recovery is yet to filter down to pay, with wages still falling in real terms.

LSL's index also showed that landlords' return on their investments had hit a rate of 11.8% a year, the highest in four years.

It means the average landlord in England and Wales saw a return of £19,475 across the year, with rental income of £8,158 and a capital gain of £11,317 on the property's value.