YORK'S slowing housing market is resulting in a boom in city lets, a new survey has revealed.

Latest research from the Royal Institution of Chartered Surveyors (RICS) says rents are rising at their fastest rate for over three years.

RICS states the increases are due to rising tenant demand which is outstripping the number of new properties to let which come onto the market.

And York letters today agreed that the city was following a national trend for rents, as buyers preferred to wait and see how the housing market progressed over the next few months before plumping to buy.

John Hards, of Countrywide Residential Lettings, in York said: "The past three months have been exceptional. We have had a record amount of lets, although house prices have increased, affecting yields."

RICS said the rise in demand was as a result of an increase in interest rates. It also reported a slowdown in rental property as the buy-to-let boom began to tail off.

Its national figures showed rental demand for both flats and houses was up 23 per cent respectively on the same quarter last year. Private sector tenants were dominating the market, accounting for 81 per cent of lettings.

London saw the greatest rises in demand with the south-west not far behind.

Jeremy Leaf, RICS spokesman, said: "There is definitely an increase in demand, particularly for the lower end of the market. Uncertainty about market prospects and poor affordability mean that people are opting to rent.

"Sellers and agents are facing a different breed of buyer.

"Enthusiastic buyers keen not to miss out on getting a foot on the property ladder have gone.

"Now the attitude of 'why rush?' is influencing demand for rental property."

Adele Barlow, of Quantum Estate Agents, in Walmgate, said: "The market is performing very well. Properties are coming and going within a couple of weeks.

"This is the same for rental properties all over the city. Typically, first-time buyers are renting because they are unable to get onto the housing market, so more are now opting to let."

Liz Peacock, of Hunters Estate Agents, in Colliergate, said: "Our department has just boomed. We are getting a lot more rents than we were and we have increased the rent price slightly because of the demand.

"We anticipate this will carry on through to the middle of next year, until we see what's going to happen in the housing market."

Updated: 08:22 Wednesday, December 08, 2004