Rising property prices have pushed demands for rented homes up to a five year high, new figures have shown.

The Association of Rental letting Agents (ARLA) revealed demand has reached new heights as consumers are increasingly priced out of the market and property prices soar.

The problem is thought to be at its worst in London, where more than two thirds of private letting agents say they now have more potential tenants than available properties.

High levels of demand have also hit the South East, where up to 60% of agents do not have enough properties to cater for prospective tenants.

Meanwhile, across the rest of the country, an average of 37% of letting agents are recording a shortage in available property.

And the ARLA said a softening of the housing market is unlikely to change the current demand for rented properties. Instead, it said that consumers are now holding off before they consider buying a house.

Ian Potter, head of operations for ARLA, said: "This peak in demand should come as no surprise.

"It has been driven up by the many competing demands for rental accommodation and now we have softening house prices.

"Softening in the sales market is always a driver of further demand in the rental market."

The trade body's figures also showed people are staying in rented accommodation longer, unwilling to give up their properties due to escalating demand.

Tenants are now more likely to stay in a property for over a year, the figures said, while the average gap between tenants is now often less than a month.

It would also appear landlords are benefiting from the increase in demand, with rent levels receiving a push over the past six months.

Nearly three quarters of letting agents in central London said they had seen a notable rise in levels since June, while almost half of agents in the rest of the country recorded a similar increase, the ARLA said.

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