Landlords have reason to celebrate as tenant demand outpaces available properties, according to a new report.

Research, Carried out by the Royal Institute of Chartered Surveyors (RICS), also shows that rents are rising at their fastest rate for over three years.

23 per cent more surveyors reported a rise than a fall in tenant demand over the past three months, a 9 per cent increase on July.

Rental demand for flats and houses is also up on the same quarter last year by 23 and 22 per cent respectively.

Tenants in the private sector are dominating the market, accounting for 81 per cent of lettings.

BDO claim the boom is down to increasing interest rates which are creating too much of an uncertain market for potential buyers and that the tail off of the buy-to-let boom is to blame for the lack of available properties.

Jeremy Leaf, RICS spokesperson, said: “There is definitely an increase in demand, particularly in the lower end of the market. Uncertainty about market prospects and poor affordability mean that people are opting to rent.

“Sellers and agents are facing a differing breed of buyer. Enthusiastic buyers keen not to miss out on getting a foot on the property ladder have gone. Now the attitude of ‘why rush?’ is influencing demand for rental property.”

Geographically, London saw the greatest rise in demand, with the South West coming a close second.

The report goes on to show that the same areas are showing a decline in house prices as a result.