The cost of renting a property in the UK has reached an all-time high as people continue to struggle to get onto the property ladder, offering a much needed boost to the lettings industry, according to new research by HomeLet.

The average rental price of a UK property increased by 2.2% in July to £767 – the highest it’s been for over three years. A reason for this increase is the dwindling amount of people who are able to purchase their own home. In 2008, 71% of houses in the UK were owner-occupied. But statistics from the latest Department for Communities and Local Government English Housing Survey show this lowered to 67% last year.

Meanwhile demand for rented properties has boomed, with 3.4m households now privately renting, an increase of 1m since 2005. In addition, the HomeLet Rental Index shows there’s been an increase in the number of tenants aged between 26 and 35 who were previously living with a relative – which could be another sign of people feeling the squeeze during the recession and staying at home for longer.

John Boyle, managing director at HomeLet, said: “Although the increase in rental figures is a sign of an economic struggle by the UK population as people continue to experience difficulties in purchasing their own home, property investors and landlords could now take advantage of the increase in available properties and purchase more quality buy-to-let houses. This is therefore a very encouraging sign for the lettings industry.”