Increasing numbers of landlords defaulting on their mortgage repayments will pose a threat to tenants, while problems with the Local Housing Allowance (LHA) system will result in more tenants failing to make their mortgage repayments.

Both landlord and tenant defaults and arrears will be compounded by rising unemployment.

Ian Potter, operations manager at ARLA, said that as demand rises due to a lack of social housing, there will also be mounting pressure on the sector to provide good quality rental properties.

He added: “There has been little commitment from the Government thus far on economic measures to help the wider industry meet property demand. In a recent debate the Housing Minister displayed a lack of empathy with those living in the PRS when he argued that it consists of three million households – when it in fact consists of eight million people. The Government continues to evade implementing measures to help the sector.”

However Potter also pointed out that 2010 will bring opportunities for investors as more buy-to-let mortgages become available while house prices have fallen and become more affordable

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