A lack of demand in the property market is fuelling a lettings boom, a survey has found.

New instructions to let increased in the Royal Institution of Chartered Surveyors (Rics) lettings survey in July, while new instructions to sell have fallen.

The report showed 43 per cent more chartered surveyors reported a rise than a fall in landlord instructions compared to 30 per cent in the previous quarter.

Equally, both new instructions to let houses and flats increased at the fastest pace in the survey's history with 47 per cent and 39 per cent more chartered surveyors reporting a rise than a fall respectively.

On the other hand, 27 per cent more surveyors reported a fall in new buyer enquiries rather than a rise, although this was a slight improvement compared to 35 per cent in June.

Rics spokesperson James Scott-Lee said: "The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up. Many are willing to 'hold' and await the return of capital appreciation.

"Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns.

"Established investors have been reaping the benefits of the housing downturn for sometime and will continue to do so in the short term. However, ever increasing supply could have an impact on rental growth as tenant options increase."

The proportion of landlords opting to sell at the expiry of the tenant lease fell to 2.1, the lowest level on record from 4.2 per cent. Rental expectations fell slightly with some surveyors expecting over-supply to push rents downwards in the next quarter.