The continuing uncertainty in the UK housing market is having knock-on effects for the rental market. A new survey has revealed that rents are expected to continue to rise for the foreseeable future as frustrated would-be first time buyers increase rental demand, especially in big cities.

About 42% more surveyors reported a rise in rents than those who saw a fall during the three months to the end of April, the Royal Institution of Chartered Surveyors (Rics) survey said. Tenants’ rising costs are most marked in London and south-east England.

Some 33% more surveyors expect rents to go up than those predicting a fall.

Although the market is beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market.

There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise.

A similar survey, published last month, said that rental costs in England and Wales had reached a record high in April.

LSL Property Services, a company that owns a lettings agents network including chains such as Your Move and Reeds Rains, said the average rent stood at £692 a month. However, there have been some signals that lenders are looking more favourably towards people looking to get on the property ladder.

There are now 183 mortgage products on the market aimed at first-time buyers, compared with 62 products two years ago, according to financial information service Moneyfacts.

There are also 31 different loans available for people offering a 5% deposit, although this is far lower than the 1,079 available at the height of the property boom in July 2007.

A situation where rents are rising consistently and there is little mortgage availability for first time buyers would spell chaos for the UK housing market. Thankfully the signs of stimulation at the bottom of the property ladder, including the new mortgage products available, suggest that this will not be the case.

The Land Registry has released figures that show house prices in England and Wales have fallen very slightly over the past few months.

Its latest survey of all completed sales shows the average price rose by 0.8% in April to £163,083. However, the average sale price in the February to April period was 1% lower than in the previous three months - the best indicator of short-term trends.

Prices in April were 1.3% lower than a year ago, and monthly sales have also fallen, by 14% in the past year.

These figures reflect the general stagnation of the market, which has been due to severe rationing of mortgage funds by lenders, and fears of higher unemployment among would-be buyers.

The Land Registry survey recorded distinct regional variations in house price movements. In London, house prices jumped 3% in April, to an average of £352,187. This means London’s annual change now stands at 5%, which is much stronger growth than that seen by any other region in England and Wales.

Only London and the South East experienced increases in their average property value over the last 12 months. By contrast, prices in the north-east of England fell by 8% in the year to April.

Last week, one of the UK’s biggest lenders, the Nationwide, said the housing market was reflecting the lacklustre state of the economy. The overall volume of mortgage lending remains subdued, suggesting there will be little improvement in activity, or revival in prices, in the coming months.