Increased tenant demand and low levels of rental property coming onto the market in London has pushed rents higher in the first half of this year, according to the latest RICS Residential Lettings Survey.

Demand for rented homes during the three months leading up to April increased by 35% compared to the previous quarter - the highest level for more than two years, a RICS poll shows.

In the last 12 months, around half as many first-time buyers have been able to secure mortgages compared to the average for the previous ten years. High property prices, a lack of new homes coming onto the market and stringent mortgage lending conditions, have prevented many potential buyers from purchasing their own property, forcing them into rental accommodation instead.

With 186,000 buyers kept off the property ladder, demand for rental accommodation is soaring. "Would -be buyers shut out of the housing market are snapping up rental properties at the fastest pace in two years," the UK's biggest buy-to-let lender, Paragon, said recently.

Tenant demand is also high due to the fact that employment conditions in central London are much healthier than they were 18 months ago.

Jeremy Leaf, a spokesman for RICS commented, "The current buoyant state of the rental market is likely to persist for some time to come, given the challenges facing the sales market."

Vatche Cherchian, Camden Lettings Manager at Edmund Cude, comments, "In the current economic climate, as people find it increasingly difficult to obtain a mortgage and need to save more money for larger deposits, we have seen a large increase of applicants in the rental market who would have been taking their first step on the property ladder by now."