Rental data for March reversed what had been a four-month downward trend, according to the latest Buy-to-Let Index from LSL Property Services plc.

Compared to February, the average rent in England and Wales rose by 0.5%, to £735 per month. The return to a growth trend leaves rents in March 4.2% higher than a year ago, compared to the 3.3% annual growth recorded in February.

Rents were higher on a monthly basis in six out of ten UK regions. The strongest growth was in London where a 1.3% monthly rise took rents in the capital to a fresh record, averaging £1,106 per month. This was followed by the North East where rents grew 0.9% compared to February, while in Yorkshire and the Humber rents increased by 0.6% on a monthly basis. However, rents dropped the fastest in the South West, falling 0.5%, followed by Wales where rents dropped by 0.4% in a month.

Nine out of ten regions saw rents rise on an annual basis. London experienced by far the fastest annual increase, leaving average rents in the capital 7.9% more expensive than a year ago. Wales and the East Midlands both saw annual rental inflation of 3.9%, while rents in the North East are now 3% higher than in March 2012. The only exception to annual increases was the South West, where rents are still down marginally, dropping 0.2% over the last year.

David Brown, commercial director of LSL Property Services, said: “Winter staged a last-ditch counter offensive in March. But in spite of the unseasonal weather the rental market has gained some ground. Over the next few months it looks likely the spring bounce will continue. Of course, the regional picture remains more complicated. This month witnessed even more divergence between London and the rest of the country. But the overall picture is clear. With only modest improvements in the UK’s housing supply, rents will keep being forced upwards.

Brown added: “Landlords shouldn’t count their spring chickens yet, and the hunt for a reliable yield will be as varied and complex as ever. Especially given improvements in the purchase market as first-time buyers are seeing progress on mortgage availability, and many will have welcomed the new Help-to-Buy initiatives in March’s budget. When it comes to buy-to-let, there remain plenty of reasons to be cautious, but it will be tempting to think of March as a turning point for rents.

“For most people in need of somewhere to live, the private rented sector continues to be a more affordable option. Lenders are still wary about their balance sheets, resulting in new lending to first time buyers being matched by mortgages with much more equity, such as buy-to-let. These loans are also at very low rates, and alongside newly buoyant rents, the availability of this credit will make many landlords tempted to expand their portfolios.”