Rental prices increased at a slower rate as some tenants resist the sharp rises in rent levels seen in recent quarters, according to the latest quarterly RICS Residential Lettings Survey.

Rents continued to increase across the UK, albeit at the slowest pace in two years, as in the three months to January a net balance of +13% of surveyors reported increases in past rental values (down from +21% in the previous quarter).

However RICS say demand for rented accommodation remained relatively strong with 19% more respondents reporting rises rather than falls in interest from prospective tenants. Demand has been strong growth in recent quarters; but with an increasing number of first time buyers looking to beat the expiry of the stamp duty holiday in March, it seems some could now be turning to the sales market, and slowing rental growth.

Rental supply to the market remained in positive territory in the three months to January with 8% more respondents reporting rises rather than falls in new instructions. Supply has now remained in positive territory for four consecutive quarters.

With rental growth beginning to slow in many areas of the country and a recent upturn seen in prospective buyers of property, RICS say more landlords are looking to sell at the end of a tenancy agreement. 4% of landlords chose to place their property on the sales market in the three months to January, a significant increase from the previous quarter’s reading of 2.6%.

From a regional perspective, surveyors in the North of England reported the lowest rental reading in the country, for the quarter while in London the increase in rents was the most modest since mid-2009.

Commenting, Michael Newey, RICS spokesperson, said: “With many potential first time buyers having been forced into rented accommodation due to problems with obtaining affordable mortgage finance, rental prices have grown quickly across much of the country in recent times. However, it seems that tenants may be becoming less willing to meet increasing rental values.

“While still growing, demand from potential tenants is also beginning to slow. With a recent upturn in buyers entering the sales market prior to the expiry of the stamp duty holiday in March, it seems that those who are in a position to get a foot on the property ladder may have chosen now to do so.”