The number of brokers saying rents increased in the three months to July exceeded those  reporting declines by 27pc, a survey published by RICS found. In the previous quarter, 30pc  more reported increases than drops.

“Continued difficulty in securing mortgage finance, worries over a double dip in housing and large deposits required by lenders are leading to higher numbers seeking to rent rather  than buy,” RICS said in the statement.

More than one million homeowners unable to achieve sale in past year.

A third more respondents predicted higher rents overall in the next quarter than those who  forecast a decline, RICS found, while demand for house rentals outstripped that for flats.

 

Borrowers have been struggling to secure significant deposits of at least 25pc to secure  the best mortgages rates. They are also concerned about making large financial commitments amid widespread job insecurity in the fragile economic recovery and the rising cost of  living as inflation escalates.

Banks have restricted loans for buy-to-let transactions, reducing the number of rental  properties entering the market, and landlords are showing little appetite for selling  properties after tenants move out.

The number of mortgages approved in the UK dropped for the second month in a row in July to  hit a five-month low, the British Bankers’ Association revealed on Wednesday.

 

Home loans slid 2.5pc from the previous month to 33,698 – or just 1,000 a day. The total is  down 18.5pc from a year earlier.