Increasing numbers of homeowners are renting out their property because they are unable to sell it, figures have revealed.

According to The Royal Institution of Chartered Surveyors (RICS) the letting of properties has increased at its fastest pace since its survey began during the three months to July.

Overall 43 per cent more chartered surveyors reported seeing a rise in the number of new landlord instructions than those who saw a fall, up from 30 per cent during the previous quarter.

The group have put the jump down to frustrated sellers deciding to rent out their properties after being unable to sell them in the current market.

It added that the credit crunch and housing market downturn have boosted demand for rented property as people either delay buying somewhere or are unable to obtain a mortgage.

The group said tenant demand rose at its fastest rate since 1998, with 37 per cent more chartered surveyors reporting an increase in lettings than those who saw a fall, up from 30 per cent during the previous quarter.

But despite the strong level of demand for rented property, chartered surveyors expect rents to fall slightly during the coming quarter, pushed down by oversupply in the sector.