The latest figures from the National Landlords Association (NLA) have shown that there has been a significant increase in the number of people who are now looking to rent property rather than applying for a homeowner loan and buying.

Not surprisingly, the reason given for this is due to the current lack of available funding through mortgages and homeowner loans, as banks and building societies continue to restrict their lending criteria, despite increasing pressure from the Government.

The other main factor which is putting off prospective home owners is the continuing depreciation of house prices, which according to the latest figures from the land registry, have fallen by 8 per cent over the course of the last twelve months.

Although the demand for rental property has increased, having the effect of making rents more expensive and almost comparable with the cost of making repayments on a homeowner loan or mortgage, the availability of rental property has also increased, as many people who have been trying to sell their properties over the past few months have simply given up on the idea until the market returns, deciding instead to let their existing home to allow them to be able to move.

Although banks and building societies are being particularly cautious about who they will offer a secured loan to at the moment, the main obstacle for potential buyers is the amount of deposit they require, as the most competitive loan deals at the moment usually only allow around 60 per cent loan to value.

Meanwhile, Steven Hilton of the NLA has issued a warning to those individuals renting out their homes instead of selling, advising them to ensure that they comply with all the regulations for letting property. He said “This can lead to problems as inexperienced landlords, who take a short term view to letting their properties, could find themselves out of their depth.”