Rents across the UK continued to rise during June, but the first half of 2016 has been characterised by a slowing in the pace of rental increases, new data from the June HomeLet Rental Index reveals.

The index shows that rents agreed on new tenancies across the UK (excluding London) over the three months to the end of June were up by 3.5%, compared to the same period in 2015. In the capital, meanwhile, rents were 3.9% higher.

By contrast, the UK-wide figure for May was 4.4% (6.2% in London). The more modest rental increases seen in June are a continuation of a trend that has developed throughout the first half of the year, with rents rising across much of the UK each month, but at a slower pace than was the case throughout most of 2015. For example, in June last year rents were rising at an annual rate of 7.8% (10.1% in London).

The report concludes that the slowing in the pace of rental increases may reflect landlords’ recognition that an affordability ceiling is approaching.