Falling house prices, worries over public spending cuts and a scarcity of mortgage finance have helped to push rent prices across Belfast and surrounding areas up by more than 7% since the start of the year, new research published today has revealed.

The detailed report into the private rented sector by one of Northern Ireland's largest dedicated online lettings sites, Citylets, shows that while house prices fell steadily from January to September, average rents leapt from £544 a month to £586 over the same period (+7.2%).

The private rented sector has doubled in size over the last decade in Northern Ireland, with rent receipts now contributing up to £800m annually to the local economy.

In the year to end-September, average monthly rents for one-bedroom apartments rose by 7.5% to £493, the report said, while rates for three-bedroom houses increased by almost 3% to £582.

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Rents for two-bedroom houses fell slightly, by 2.5%, to £442 a month.

The quarterly report also shows signs that more rental properties are coming on to the market. The additional choice should favour tenant budgets going forward and is evidenced by the increase in the average time it now takes to let most property types, it said.

In the three months to end-September, this increased from 48 days to 56 days.

Citylets Rental Market Analyst, Dan Cookson, said: "A general lack of finance, the spectre of public spending cuts, and a weak housing market, continue to fuel growth in a sector that has already doubled in size over the last decade.

"There's no doubt that the economic shockwaves we have been exposed to over the last few years continue to make first-time buyers nervous, many of whom are still saving for the big deposit that's now required by the banks."

Citylets managing director and founder Thomas Ashdown said that in many areas, tenants who had only planned to rent for a short time were choosing to renew leases.

"Economic uncertainty is causing everyone to rethink their future and with the housing market under continued pressure, the private rented sector is benefiting to some extent.

"People remain wary about the crash in house prices and wonder if there's more to come. They're also concerned over the effect of government cuts on their own ability to meet long-term financial commitments.

"Additionally, many first-time buyers still can't get a mortgage at an affordable rate," he said, noting that renting was something few would consider only a few years back, but that is not the case today.

"With house prices still weak and worries about jobs, people are hedging their bets."

(BMcC/GK)