The demand from people to rent property is still rising in the UK. However, the rate of increase is falling, with 13% of surveyors reporting an increase in demand for rental property in the period November 2004 to January 2005, down from 23% in the previous quarter.

The research from the Royal Institution for Chartered Surveyors (RICS), points out that while demand for property to rent is positive, the growth is at its lowest level since October 2002.

Growth in demand was greatest in family homes, far out-stripping flats, which suggests that this is the sector of the purchase market where people are feeling the greatest uncertainty.

RICS spokesperson Jeremy Leaf said: “It looks like any signs of panic in the housing market are largely over, bringing stability to the lettings market. However, many people may still be wary of buying in the current climate ­ which bodes well for tenant renting.”