Rightmove says letting agents are reporting “extraordinary demand” in many parts of the country, with an increasing number of tenants positively wanting to rent rather than seeing it as a last resort because they cannot afford to buy.

“A growing number of people like the transience of renting, without the complications, commitments and costs of buying and then selling” according to the portal’s housing market analyst Miles Shipside. 

“Many letting agents are reporting viewings and tenancy applications on the same day as marketing properties. In some cases they’ve nothing left to rent until tenants move out or a new influx of investor landlords gives some short-lived respite to tenants-in-waiting” he says.

Rightmove says both investor landlords and first-time buyers looking to buy the same smaller homes, but are finding them in short supply. 

As a result, homes with two or fewer bedrooms are now at their highest price ever, an average of 9.6 per cent, or £16,105 more expensive than a year ago, far outstripping the overall annual rise of 5.6 per cent for all property types.

“As they’re typically owned by potential first-time sellers, the price gap and costs of moving to the second step on the housing ladder deter them from coming to market. Competition is most fierce in this sector, with first-time buyers and buy-to-let investors going head-to-head for the same properties” says Shipside.

Shipside says Build To Rent may take the role of the cavalry, eventually coming to the aid of the UK housing shortage, but that it will take some years for institutional investment to be on a sufficient scale to make a difference.