The pace of private sector rent rises picked up in February amid continued strong demand in the sector from tenants, with the South East seeing the biggest annual increase, a major lettings network has reported.

Rents rose by 1.6% year-on-year across England and Wales to reach £743 a month on average, following a 1.4% annual increase in January, according to LSL Property Services, which owns national chains Your Move and Reeds Rains.

LSL said rents increased by 0.1%, or around £1, between January and February, marking the first monthly increase seen since last October.

The sharpest monthly rises were seen in Yorkshire and Humber and the West Midlands, where both regions saw a 1.2% hike. Rents in Yorkshire and the Humber average £535 a month and in the West Midlands they have increased to £561 typically.

David Newnes, director of LSL Property Services, said: “Property to rent remains in high demand. Despite great improvements in the prospects of many first-time buyers, there are still millions of households who rely on a healthy private rented sector for their homes.”

Mortgage support schemes such as Help to Buy have made it easier for many people who had previously been living in the rental sector because they only had a small deposit saved to buy a house to finally clear the hurdle onto the property ladder in recent months.

Housing Minister Kris Hopkins said the figures were not an accurate reflection, adding that Office for National Statistics figures show rents are falling in real terms.

He added: “With millions of people living in the private rented sector, we're working to build a bigger, better private rented sector.

“This includes the £1 billion Build to rent fund, which will deliver new-build homes specifically for private rent, and £10 billion of Government-backed guarantees to encourage more investment in the sector.”