RENTS in the South East continue to fall, although they remain the highest outside of London, according to the Royal Institution of Chartered Surveyors (RICS).

Nationally rents are rising at their fastest rate for over three years, compared to the drop in the South East, although there has been a slowdown in the pace of decline.

Tenant demand for rental property showed a moderate increase in the third quarter of 2004 because of interest rate rises.

Potential buyers are opting to rent due to the uncertainty in the housing market. There has also been a slowdown in rented property available as the buy-to-let boom tails-off.

In the South East, the average rent for a one-bed flat is £575; a two-bed flat is £725; a three-bed semi is £850 and a four-bed detached is £1,200.

Trevor Hines, RICS South East director, 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.”