The RICS Q4 2008 residential lettings survey shows that the number of surveyors reporting a rise in rents went from -48% to -12% between Q3 and Q4 last year.
The net balance represents the lowest level in the survey’s 11-year history.
The South West saw a marked drop in rental prices, with the number of surveyors seeing a rise in rents go from 0% in Q3 to -73% in Q4.
Yet the supply of rental properties continued apace.
Some 46% of surveyors said they were receiving more instructions for flats to rent than the previous quarter and 53% of surveyors reported more instructions to rent houses.
Jeremy Leaf, spokesman for RICS, says: “The marketplace has become more competitive as reluctant landlords continue to look to let properties they are unable to sell.
“With property sales at historical lows, the rental market will continue to boom – provided unemployment levels do not increase significantly.”
He adds: “The downward pressure on rents will increase in the coming months where supply matches demand but with house prices still falling, yields will continue to increase for many investors.”