(Bloomberg) -- U.K. asking prices for rental homes rose at the fastest annual rate on record as a surge in demand from tenants outstripped the supply of properties on the market.

The online property portal Rightmove Plc said the average price landlords sought rose 9.9% from a year ago in the fourth quarter and by 2.1% from the previous three months. The growth in rental values outpaced gains in the cost of purchasing a property in all except three regions. 

The figures underscore the depths of Britain’s cost-of-living crisis, which is set to worsen in April with planned increases in taxes and utility bills. It adds to pressure on both the Bank of England to step up its fight against inflation and on the Treasury to find measures that would soften the blow for the poorest households.

“The imbalance between supply and demand is set to continue,” Tim Bannister, Rightmove’s director of property data, said in a statement released Thursday. “There is a limit to what renters can afford to pay, which will prevent rents rising at the same rate we’ve seen over the past year.”

The report also showed:

  • Rightmove expects rents to rise about 5% this year, slower than the current rate. 
  • Landlords enjoyed the highest yields since 2016. 
  • London rents rose 10.9% from a year ago, exceeding pre-pandemic levels.

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