Tenants are forcing down rents by negotiating hard with landlords because there is an oversupply of rental property, according to the Royal Institution of Chartered Surveyors’ (RICS) lettings survey.

Would-be sellers who have chosen to rent their properties until sales improve are leaving tenants with unprecedented choice and in a strong position to bargain. Rent falls are the sharpest since its survey began in 1998, with 48% more surveyors reporting a fall in rents than a rise.

Property companies, including developers and housebuilders, are also renting out homes that they cannot sell and account for 10% of all landlords bringing new properties to market, up from 8% in October. The supply of rental homes in London has grown by +67% in the past year and demand is up by +20% year-on-year, according to Knight Frank.

Rents in London have fallen by -6.9% since March last year and by -1.1% in the past month, according to Findaproperty.com. The North of England has suffered the most with a decline of -13.5%.

Estate agents said that properties that let for more than £1,000 a week were taking the longest to let, with many reporting a fall of up to -30% in rents as the number of companies taking leases for their staff decline. However, demand for rental property is growing at double the average rate, which is the fastest in the history of the survey, as would-be first-time buyers rent because they cannot find mortgage finance.

Estate agents said that if this were to continue, demand could soon outstrip supply and rents could rise. Some “reluctant landlords” who put their properties on the market when rents were high last year have withdrawn them as rents fall, which could exacerbate a future shortage, agents say. Meanwhile, the number of house sales rose to its highest level for a year last month, as a surge in buyer interest in January translated into increased transactions, with an average of eight sales per estate agent, according to a recent report by the National Association of Estate Agents (NAEA).