And the survey says…

The latest lettings survey from the Royal Institution of Chartered Surveyors (RICS) said frustrated home owners were unable to sell their properties due to a lack of buyers created by the drying up of mortgage finance…

It has resulted in an oversupply of rental properties and rental prices falling for the first time since April 2003.

The number of estate agents reporting an increase in properties being put on the rental market has reached a record high of 56 per cent, according to RICS.

The strongest growth in new instructions took place in the Midlands and the North, it said.

The figures come amid a housing slump that has seen the average price of a home drop by more than £30,000 over the past year, according to Halifax.

James Scott-Lee, a Spokesman for RICS said, "The market place has become more and more competitive as many vendors have been forced to become amateur landlords, creating an inevitable downward pressure on rents."

It follows a warning by credit agency Standard & Poor's that up to 40 per cent of buy-to-let borrowers face falling into negative equity by the middle of next year.

It said the market is likely to deteriorate further because it is "more sensitive" to the difficult credit environment.

James Gubbins, a RICS member based in Westminster, said: "Renters are not looking to spend as much. Supply is outstripping demand. Rents are reducing as vendors turn to rentals."

And Francis Brown, a RICS member based in Richmond, said, "It is taking longer to let property. Tenants have more choice. More vendors who can't sell are turning to the letting market until better times."

Source: BBC Online