By Daniel Hunter

LSL Property Services have said that the cost of renting a home in England and Wales rose again in May as tenants faced charges that were 3.5% higher than a year earlier.

The survey showed that rents rose by 0.1% between April and May, although this was a smaller increase than during recent months.

This means that the average rent was £737 a month - the third highest level on record. The pace of rent changes varied in different regions, the data showed.

Tenants faced rent rises of 7.2% on average in London over the past year, with costs up by 5.2% in Wales, and up 4% in the north east of England.

The south west of England saw no change compared with a year ago - the only region not to see costs increase.

The latest month-on-month rise would have been higher, LSL said, had there not been a surge in activity in the housing market.

"Looking further ahead, sustaining the increase in new buyers will depend on how many tenants are able to build big enough deposits to get a mortgage," said David Newnes, director of LSL, which owns lettings agents Your Move and Reeds Rains.

"With wage growth so weak compared to inflation and house price growth, it looks like deposits will become less affordable - which will keep demand for rented accommodation high."

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