The cost of renting a home is set to increase as the credit crunch hits landlords and the buy-to-let market dries up.
Average rents have already risen by 12% over the past six months to reach a new record of more than £1,000 per month, according to buy-to-let lender Paragon.
And this trend is set to continue as the ongoing credit crunch puts pressure on buy-to-let mortgage rates. Moneysupermarket.com says the number of buy-to-let mortgages available has fallen by 40% in the past 30 days alone.
And the cost of remaining products is on the rise - figures from data provider Moneyfacts reveal the average buy-to-let rate has increased from 6.35% in August 2007 to around 6.70% today.
Despite increasing demand for rented properties, landlords are struggling to secure finance to buy new properties. And those whose current mortgages are coming to the end of their discounted period face the same payment shock that homeowners are currently experiencing.
The financial impact of this will not only hit the pockets of landlords - renters are likely to see the cost of accomodation increase over the coming months.
Ironically, tenant demand for rented homes is actually at its highest for almost five years as increasing numbers of people are priced off the property ladder or deterred from buying by the credit crunch.
Louise Cuming, head of mortgages at moneysupermarket.com, says: "You would imagine this would mean the buy-to-let market would start to grow. However, our research shows the number of buy-to-let products has decreased from 4,025 to 674 in just one year, with nearly 600 of these products removed since 31 March 2008.
"As stringent lending pushes people into the rented market, the decrease in the number of buy-to-let mortgages becomes increasingly alarming.
"I fear we will soon see many people unable to buy or rent - the question is, where do they go from there?"