Buy to let properties are easier to rent and attracting higher rents because the mortgage famine is stopping thousands of would-be homebuyers from finding a loan.

Rents are soaring to match their highest ever levels as tenants who cannot buy their own home are snapping properties to rent as soon as they become available.

Letting agents all over the UK are reporting rents on the up alongside rising demand from renters.

They blame the problems in finding a mortgage plus the high cost of deposits for pushing them in to renting, according to the latest residential letting survey from the Royal Instittute of Chartered Surveyors (RICS).

For the three months ending October 31, 40% of letting agents celebrated an increase in rents.

RICS says buy to let rents are now running at the highest level since March 2007.

The demand for lettings is blamed on a lack of mortgages that is forcing people who want to buy a home in to renting.

More letting agents (33%) reported a rise in demand than a fall, the fastest increase in demand since 2008 – with hhouses slightly more attractive to tenants than flats.

New landlord instructions – a good indication of supply to the market – slipped further, marking five consecutive quarters of falling instruction – and this lack of supply means properties are sitting vacant for less time.

RICS spokesman Jeremy Leaf said: “The lettings sector has become increasingly strong over the past nine months, in contrast to the housing market which continues to slow. Many have turned to the rental market because they fear further price reductions in the housing market, or because they cannot obtain the necessary finance to buy.

“As a result, rents continue to rise with supply failing to keep up with demand. However, there are increasing indications that more landlords are recognising these benefits and looking to add to their portfolios – especially as there has been a rise in the number of providers willing to offer investment mortgages in recent months.”