London saw a 1.4% yearly fall in rents and offers the lowest yield for landlords, Your Move research showed.
The capital remains the most expensive area for tenants, with an average bill of £1,274 a month, but buy-to-let yields are at 3.2%.
Rents fell fastest in the North East with a 1.7% annual drop to £534.
However, the region offers the best return for landlords with a 5% yield, followed by the North West at 4.9%.
Overall the average rent in England and Wales hit £850 in December after an annual increase of 2.3%.
The East of England is now the second-most expensive place to rent at a typical £893.
The increase is a result of Londoners flocking from the capital for cheaper housing and the strong local economy with Cambridgeshire supporting many jobs in the region, according to Your Move.
Sue Maher, branch manager of Your Move in Peterborough, said: “We are seeing a large shift in commuting patterns as tenants look to relocate away from London, to towns like Peterborough and Norwich, which are attracting a wide range of employers.
“The City Hospital in Peterborough, for example, attracts many doctors and nurses to the area and local business parks house the offices of Travelex, Thomas Cook, Mastercard and Amazon to name a few.
“As a result, these areas are predominately rented by young working professionals and families, rather than students or older residents.”
Elsewhere rent prices in the East Midlands lifted by 2.8% annually and by 2.7% in the North West.