With so many people preferring to rent instead of buy, rents are rising again and the rise in rentals arrears expected to result from recession has yet to materialise, says a new survey.

The Buy-to-Let Index from LSL Property Services, which owns the UK's largest lettings agent network including national chains Your Move and Reeds Rains, says the average rent in the UK rose 0.6 per cent to £663 per month in April, 2.2 per cent up on a year ago.

Rents have risen for the third successive month and are now only £25 per month below the August 2008 peak.

Yields on buy-to-let property rose to their highest level all year at 4.8 per cent, as rent increases narrowly surpassed slowing house price inflation. The monthly increase in house prices for the average rental property was 0.4 per cent in April - a drop from the 2.1 per cent increase seen in January.

Total return from investing in buy-to-let over the last year reached 12.8 per cent. The average landlord would have made £19,765 in the past year made up of £7,115 in rent, and £12,650 in capital appreciation before ancillary costs including mortgage interest charges and management fees.

So far as arrears are concerned, around £220.3 million of rent in the UK was unpaid in April, a drop of £7 million from March.

David Brown, LSL commercial director, says: "Despite the distraction of the election, the buy-to-let market has gone from strength to strength and landlords have seen their highest rents and yields this year.

"Political uncertainty will continue to depress demand for house purchase. With transactional levels subdued, the private rental sector will play a more pivotal role in providing accommodation for hesitant buyers, and we expect tenant demand and rents to be boosted in the medium-term."