Unaffordable house prices for many first time buyers has helped drive up new lets by almost a quarter compared with last year for independent letting agency, Leaders.

The company, who are particularly strong in the South East, reports a record-breaking June during which the total number of new lets was up 31% compared with June 2004, and 6% higher than the company’s forecast for the month. Over the whole of the 2nd Quarter the total number of new lets was up 24.5% compared with the same period last year.

Commenting on the figures, managing director, Paul Weller said, "We have seen a strong lettings market for many months now, mainly because house prices are still unaffordable for many first time buyers, and many of those who can afford to buy are waiting to see what happens in the sales market before committing to a purchase."

"However, renting is not only an affordable option, it also remains a popular choice for students, people who are in-between owning properties and those working away from home."

Leaders’ figures show that supply from landlords matched the demand for rented property, with an increase in instructions of 34.5% in June compared with the same time last year, and up 19% over April, May and June as a whole compared with the same period in 2004. The total number of properties available to let with the company was up 23% in May 2005 compared with last year.

Average rents were also up; across the company as a whole - Sussex, Surrey and Hampshire - average rents rose 3.4% from £671 in June 2004 to £694 in June 2005. The biggest increase was in Surrey, where rents rose 8.5% on average from £750 to £821. Sussex saw an increase of around 5% from £734 to £771, with rents in Hampshire remaining stable at around £612 per month.

A survey of Leaders’ tenants and landlords of new tenancies during the last few months portrays an interesting snapshot of today’s typical landlord and tenant:

• 52% of Leader’s new tenants were male
• 47% were single
• 32% were living with their partner
• 15% were married
• The majority - 78% - had no children and were under 30 years old (65%)
• 56% were renting for the first time; and of those who had rented before, 19% had been renting for 5 years or more.

The average tenancy was for a period of 23 months with 77% planning to continue renting after their current tenancy ends – the majority for several years. There were a number of different reasons given for choosing to rent, but the main reason was not being able to afford to buy their own home.

The majority of tenants - 63% - used the Internet, specifically the Leaders’ website, to look for their rented home, and many said they preferred this method because of speed and ease of searching and the ability to view photos.

• 69% of landlords of new tenancies were male with the majority over 40 years old (61%)
• 14% were aged under 30 years
• 5% were 70 years or over

Among landlords:

• Just over half the landlords surveyed (51%) had only 1 property
• 28% owned 2-5 properties
• 13% owned 5-10 properties
• 8% owned 10-50 properties
• 29% were new landlords
• 16% had been landlords for more than 10 years
• The majority saw their investment as long term and 95% said they would not sell their properties if house prices fell.

"Our figures paint a very positive picture of the current rental market," said Mr Weller. "We are encouraged by the consistently strong demand from tenants, gradually rising rents and the confidence of investors."

"Our survey found that there were many reasons apart from high house prices why people choose to rent; the most common ones being as a stopgap between owning homes, for flexibility, for accommodation whilst working or studying away from home, and for convenience, that is, not wanting the hassle or responsibility of home ownership. We believe there will always be people wanting to rent, whether property is more affordable or not, and that buy-to-let is still a sound investment for those who seek professional, independent advice."