After months of weak demand, the market for buy-to-let investors is beginning to stabilise thanks to new tenants taking up the excess of privately rented properties.

Figures from the Association of Residential Letting Agents showed that one third of its members felt the supply and demand of such property was now in balance, up from 19 per cent last quarter.

When asked whether they were more residential properties on the market than there were tenants, fewer than half of the members said there were, down from 70 per cent three months ago.

At the same time, the number of ARLA members signing up 10 or more tenancies has increased, as has the average number of new tenants, signalling more people are committing to rental agreements.

There is even evidence to suggest that the result of fewer new residences coming onto the market at a time when tenants are more confident is swinging the market in favour of the buyer.

Most notably this has been seen in South East, where three times as many ARLA members said there were now more tenants than properties than there were in the last quarter.

The findings, released last week, also showed that the average void period of a rental home has dropped for the first time in more than a year, indicating that properties are being rented more quickly.

In the winter of 2008 the average length of time for a property to remain empty was 3.8 weeks across the UK, yet by May 2009 this had risen to 4.3 weeks as homes became harder to rent.

Now however, the figure has dropped to an average 4 weeks indicating that the rental property market is “picking up”, ARLA said.

Group operations manager Ian Potter said: “This shift in the balance of supply and demand is extremely significant for the private rented sector. It gives further evidence to suggest that the property market as a whole is getting back on its feet.

“This shift also indicates that confidence is rising among prospective tenants; it seems that people who delayed setting up home 12 months ago, now feel secure enough to proceed. Equally, those who historically have shared a rental property seem happy to set out independently.”