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The rental market boomed to record proportions as housing sales diminished all across the UK.

According to the latest Royal Institute of Chartered Surveyors Lettings Survey, new buy to let properties increased at the fastest pace in the survey's history.

RICS says this is due to many would-be-sellers finding that becoming a landlord is a better option than selling in the current climate.

The survey found that 43% more chartered surveyors reported a rise than a fall in new landlords in the second quarter of 2008, compared to 35% in the first quarter of 2008.

RICS surveyors report that frustrated vendors have been placing their property in the buy to let market to let as they have been unable to agree sales due to a lack of demand in the housing market.

Significantly, RICS found that demand for family homes remained stronger than for smaller flats. The Institute says many would be buyers have been forced to rent as the route to mortgage finance has been blocked. 43% more surveyors reported a rise rather than a fall in demand for rented houses, compared to 34% of surveyors who reported a rise in demand for smaller flats.

And rents have continued to rise while house prices fall - RICS says these rising profits have kept landlords committed to the market.

A spokesperson for RICS says: "The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up.

“Many are willing to "hold" and await the return of capital appreciation. Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns. Established investors have been reaping the benefits of the housing downturn for sometime and will continue to do so in the short term. However, ever increasing supply could have an impact on rental growth as tenant options increase."

Peter Bolton King, chief executive of the National Association of Estate Agents, says: "Whilst aspects of this report are encouraging, I remain concerned that the optimism for the next few months may be scarred by the current uncertainty regarding stamp duty.

“The confused messages being sent out by the Government will undoubtedly have an impact on consumer confidence as the public is understandably confused at present about whether to buy or sell. Members of the NAEA have already seen buyers adopt a ‘wait and see' attitude as a result. This of course will have repercussions on the property market as a whole and I fear next month's figures may reflect this halt in proceedings rather than the leveling out in the market place that may have naturally ensued.”

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