A lack of new supply is pushing rents higher said the latest quarterly Royal Institute of Chartered Surveyors’ (RICS) Lettings Survey to April 2010.

The net balance of chartered surveyors reporting rises rather than falls in achieved rents rose from zero to 30% - a marked contrast to April 2009 when 58% more chartered surveyors were reporting falling rents, an all-time low for the survey.

Surveyors are optimistic that rents will continue to rise with the future rent expectations net balance climbing to 36% - the highest figure recorded in the
surveys history.

RICS said that the more positive picture for rents can be attributed, in part, to the
continued decline in rental supply for both flats and houses in the marketplace. The number of new landlord instructions to let for this period is declining as the upturn in the housing sales market has tempted many of the accidental landlords to sell up with new instructions for sale on estate agents books now rising. One consequence of the turnaround in the rental trend analysis is that the net balance of surveyors reporting an increase in gross yields has turned positive for the first time in a year.

Significantly, demand for property to let remains strong with 30% more respondents reporting rises in demand from prospective tenants, the strongest reading since January 2009. Houses remain marginally more popular than flats but flats are starting re-establish their appeal.

Jeremy Leaf, RICS’ spokesperson, said: "With sellers back in the housing market, supply has fallen back in the lettings sector. This is good news for landlords as rents are set to move higher in the coming months and yield returns are likely to improve. Moreover, the news that buy to let specialists are beginning to lend again may also encourage investors to return to the market. However, the prospect of higher capital gains tax on the sale of property may in the near term encourage some existing landlords to take advantage of the current more benign tax regime."