Demand for rented property in Britain is being boosted by recent house price rises which have left many would-be first-time buyers struggling to get on to the property ladder.

At the same time, rising uncertainty about house prices and a slowing property market are causing many would-be buyers to adopt a "wait and see" approach, says the Royal Institution of Chartered Surveyors.

The group said during the second quarter of the year 29% more surveyors reported a rise in the number of people renting, compared to those who saw a fall, up from 15% during the previous three months.

At the same time 20% more surveyors saw a rise in investment landlords buying properties than those who saw a fall.

This was up from just 8% during the previous quarter and was the first time the figure moved above its long-term average of 16% for 15 months.

The group said rents were now rising at their fastest pace in the surveyors' history, and are expected to reach record levels during the next quarter.

Flats are expected to make major returns as first-time buyers delay getting on to the property ladder due to concerns over interest rates.

RICS spokesman Jeremy Leaf said: "Rising rents are offering compensation for landlords experiencing higher borrowing costs although buy-to-let investors will struggle for funding in 2008 as lenders become more discriminating."

Buy-to-let property investment advisor Assetz for Investors says it has witnessed its strongest ever sales over the last eight weeks.

And Daniel Gardiner, managing director of Glasgow letting agents Let it, said buyers from England and Ireland were investing in Glasgow. But he added: "Supply is high so the yield investors are receiving now is lower.

"A few years ago properties would be achieving a yield of between 7% or 8%. Today that figure is closer to 4% or 5%."