But tenants are also coming under financial pressure, facing higher energy bills and worried about being able to pay their rent, new research shows.
According to estate agency Your Move there was a 38% increase in lease commencements over the year to June as would be homeowners shun the property market as prices fall. This comes on top of a 3% increase between May and June.
Landlords are seeing the strongest demand for tenants for decades thanks to the credit crunch, tighter lending and the inability of first time buyers to get on the property ladder.
It is young buyers in particular who have been driven out of the market and into renting by the disappearance of 100% and 95% mortgages, according to Your Move.
'The credit crunch has buried any chances most first time buyers might have had of getting on the property ladder,' said managing director of Your Move estate agents, David Newnes.
'Mortgage finance hasn't been this hard to come by for 15 years. For landlords this is a cloud with a gold-plated lining,' he added.
The increase in tenant demand is part of a wider trend. In May 2008 the number of leases commencing was 41% higher than the year before, whereas the number of leases commencing in 2008 in total is up 34% on the same period in 2007.
'The criteria banks and building societies use for deciding how much you can borrow have got a lot tougher. People who would have fallen into the first time buyer bracket a year ago are now renting,' he commented.
But the credit crunch could also affect landlords in terms of tenants being unable to pay their bills. Price comparison website MoneyExpert.com has found that those in rented accommodation spend as much as 13% of their weekly disposable income on energy compared with just 5% among homeowners.
Tenants are also more likely to use more expensive prepayment meters and are less likely to switch to cheaper energy providers.
Monthly bills for a rented home are up by over 10% across the country so renters are feeling the pinch.
Evidence also indicates more tenants are falling behind with their rent payments. Research from insurance company AXA shows that 13% have gone into arrears in the past 12 months, with over half of these doing so in the past three months alone.
Over 50% of those already falling behind are increasingly concerned about being able to afford their rent. 'On the surface it looks like the rental market should be buoyant. But if you consider that many of those renting may be struggling to make ends meet it's certainly not all good news for buy-to-let owners,' said Mike Keating, managing director of personal loans intermediary at AXA.
