Rents in the private rented sector in England continue to undershoot inflation, but there is a need for increased house building in areas of high demand, according to the British Property Federation (BPF).

The latest statistics, based on 470,000 tenancies, by the Valuation Office Agency show that rents undershot RPI and CPI inflation in most parts of the country, with the exception of the Inner London market, with average rental growth of just 2.7% in England against RPI inflation of 2.9%, and CPI of 2.4%.

The British Property Federation (BPF) has supported the Government in its aim to deliver more rental homes and it believes initiatives such as the £1bn build-to-rent fund will result in the private rented sector making an important contribution to housing the UK’s population in the future.

The BPF also welcomed improvements to the official government rental data, as further changes are considered. It said these would create a more accurate picture of rental trends, and help to counteract some of the misinformation that exists in the sector, often generated by unofficial rental surveys.

Ian Fletcher, director of policy at the British Property Federation , said: “For the past few years private rents in England have been running pretty much in line with CPI, and significantly below fuel and energy, or food prices, or rental inflation in social housing, but you wouldn’t think so if you read some headlines. In most regions of England rents continue to undershoot inflation reflecting the tough economic conditions that people face. There will, however, always be regional variations and overheating in areas of high demand and constrained supply like Inner London, but that should not be used as being indicative of England as a whole.

“If we are to make headway in housing the nation we must look at a range of ways of housing the population. The Government appreciates the contribution that build-to-rent can make, and has offered it support with a range of measures. In a market that has been delivering less than 50% of the homes that are needed it will soon be making an important contribution to improving supply of rented homes in London and elsewhere.”