The average rent in the domestic market fell by 0.4% to £635 in April, amounting to a 6% drop compared with last year.

The letting agent Your Move says that while tenants still have the upper hand, their position is not as good as it was six months ago at the bottom of the housing slump.

Overall, those who signed leases during April saved an average of £1,050 a year compared with July last year, when rents peaked at £723.

Average rents rose 11% in the North East and East as summer seasonal work meant more tenants, while they fell by 7.9% in the North West to just £467, the lowest in England.

Meanwhile, landlords forced to rent out properties because they couldn`t sell them are now putting them back on the market.

Says Your Move boss David Newnes: "Stock levels are still relatively high in many areas of the country, giving tenants more choice and compelling landlords to compete on price.

"But sales are picking up as reluctant landlords who were forced to let their properties in the short term are now beginning to put properties back on the market, so supply is very gradually dwindling."

House prices surged ahead by 2.6% during May in a further sign that conditions in the property market are improving.

The increase was the biggest jump in prices since October 2002 and left the average UK property costing £158,565, according to Halifax.

The lift also helped reduce the annual rate at which house prices are falling, from a record 17.7% in April to 16.3% - based on the average house price during the past three months compared with the same period a year earlier.

But Halifax cautioned against reading too much into the increase, warning that even during a pronounced downturn house prices did not always move in the same direction month after month.

However, it added that there were some "tentative indications" that activity was stabilising, albeit at a low level.

Copyright © Press Association 2009

Your Move (http://www.your-move.co.uk/)