Rents across Ireland now have hit an all-time high, according to a new report.

The latest report by Daft.ie shows that the average rent is now €1,077 – an increase of 11.7% compared to this time last year.

It is the largest annual increase ever recorded by the property website, since it began in 2002.

Author of the report, Trinity College economist Ronan Lyons, said that the rate of inflation is extremely worrying.

“The first reaction to rents increasing dramatically in Dublin was for people to look elsewhere, counties further out,” he said.

“Those counties now have as little rental accommodation, relative to demand, as Dublin itself, so there’s no release valve for people, particularly in and around the capital.

“And that, I think, is what has pushed rental inflation back up as well as rents.”

He added: “The figures from the third quarter of 2016 are worrying.

“They include a new all-time high for the average monthly rent nationwide, the highest rate of annual inflation on record, as well as the joint highest quarterly increase in rents.

“The increases stem from strong demand and very weak supply. In order to bring about more rental supply, policymakers urgently need to audit the cost of building homes in Ireland compared to other high-income countries.”