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By Lucy HookerBusiness reporter, BBC News

Private rents rose faster last month than they have since records began in January 2016, latest figures show.

Across the UK, rents grew 5. 1%, with higher percentage rises recorded in Wales and Scotland, The Office for National Statistics (ONS) said.

Housing costs are usually people's largest monthly outlay, meaning sharp increases have a big impact on budgets.

However, property prices are rising more slowly, as higher mortgage rates limit what home-buyers can afford.

UK house prices ticked up 1. 9% in the year to May, down from 3. 2% in the 12 Months to April.

" UK annual house price inflation slowed again in May for the seventh consecutive month, " said Aimee North, head of housing market indices at the ONS.

" While the average UK house price remains higher than 12 Months ago, prices are now £7,000 below the recent peak in September 2022. "

Higher rents

" UK rental prices increased again, with the highest annual inflation since records began in 2016, " Ms North said.

The cost of renting rose 5. 8% in Wales, 5. 5% in Scotland and 5. 1% in England in the 12 Months to June, the ONS figures show.

The highest rises in England were found in the West Midlands at 5. 4%. In the North East they rose by only 4. 4%. In London, rents went up 5. 3%.

The latest housing statistics are released against a backdrop of easing inflation.

On Wednesday, the ONS said inflation rose 7. 9% in the year to June, a slowdown from 8. 7% in May.

But a series of interest rate rises over The Last 18 Months has pushed up mortgage rates for both homeowners and landlords.

Michelle Lawson, director at Lawson Financial, a Fareham-based broker, said rising mortgage, combined with regulatory changes meant rising rents were " no surprise".

" Landlords cannot absorb these rises any more and they are naturally having to be passed up The Chain , " She Said .

Other property brokers said a shortage of available properties meant demand was outstripping supply in the rental market.

Rhys Schofield, Managing Director at Derbyshire-based mortgage advisers, Peak Mortgages and Protection said demand was up 48% compared to pre-Covid levels while property to rent was " like hen's teeth"

" Rents being forced ever upward certainly doesn't do tenants any favours, " He Said .

Property prices

Property values increased by only 1. 9% in the year to May, The Most recent month statistics are available for.

House prices had previously been rising much more quickly than that, with annual house price inflation hitting 14% Last Year . They peaked in September 2022.

There was wide variation In House price inflation around the UK, however.

In England, the average house price grew 1. 7% to £304,000 in the year to May.

In Wales it rose 1. 8% to £213,000.

In Scotland, the average price was up 3. 2% at £193,000. And Northern Ireland saw the average rise 5% to £172,000.

Within England, the North East recorded the highest percentage increase In House prices while The East saw no growth.

Gabriella Dickens, a senior UK economist at Pantheon Macroeconomics, said they were still forecasting an overall " peak-to-trough" drop In House prices of around 10%.

" Note, though, that even if prices do fall that far, they still will be around 15% above their pre-Covid level, " she added.

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Source of news: bbc.com