Valerie Bannister, lettings director at Your Move, said: “Renters in London could be reaching the limits of their affordability as prices dropped back 1% in the last year. This will be one to watch as the year progresses.”
She added: “The dramatic rent increases in London have now slowed as people look outside the capital in order to meet their housing aspirations.”
The only other region to see rents fall was the South West where rents were down by 1.5% on the figure from a year ago, sitting at £662.
Despite the slowdown in the capital and the South West, the data from Your Move reflected a strong performance in other markets.
Rents in the East of England grew by 5.6% in the last 12 months to reach £868, although they did drop back 0.2% between January and February. In the South East the typical rent increased 3.4% year-on-year, with a 0.1% rise month-on-month. The average property in this region now lets for £878 a month.
However, it was in Wales where the fastest rising rents were to be found. The typical rental property increased in price by 7.7% in the year to February, although Wales remains one of the cheapest places to rent in this survey at £593 a month.
Your Move found the proportion of tenants in arrears was 8.1% in February. This was down from 9.1% in December and lower than the 8.7% recorded in December 2016. It was also significantly below the all-time high of 14.6% recorded in February 2010.
However, average yields continue to come under pressure and according to Your Move, the typical yield was 4.1% in February across England and Wales. This was down on the 4.2% recorded the previous month and well below the 4.9% yield seen in February 2016.
At a regional level, average yields varied from a low of 3.2% in London to a high of 5.3% in the North East.