Sharing a flat is becoming the norm for thousands more young people as the widening gap between demand and supply of private rented homes pushes rents even higher, say surveyors.

The shortage of suitable property is also exacerbated as many landlords - especially in London and the South East - sell up to quit the market, says the Royal Institution of Chartered Surveyors (RICS).

Demand for homes is surging because thousands of would-be purchasers are turning to rent after months of struggling to find mortgage finance, or failing to save the necessary deposit. Many also want to rent in case house prices fall further from here.

But demand is also being driven by a sharp rise in the number of tenants getting Government assistance to pay the rent through local authority housing allowance. This sector currently accounts for 13% of all new lettings against 8% in the previous quarter, says the RICS.

RICS spokesperson James Scott-Lee says: "The combination of strong tenant demand and a limited stock of good quality properties on offer is pushing rents ever higher across much of the country.

"This is the case both for houses and flats. And with mortgage finance for first-time buyers likely to remain in short supply for some time to come, this imbalance is set to persist. The inevitable outcome is that rents will continue to increase."

One leading letting agency predicts average rents in prime areas of the capital will reach £1,052 per week by December, up £15 on current rents of £1,037. Property consultant Cluttons says this means an extra £780 a year for tenants to pay.

Persistent demand for lower budget homes has resulted in an acute shortage of properties at the lower end of the market, in the £250-£700 per week bracket.

Tenants of these cheaper properties now face uplifts of up to 10% at renewal. Overall, average uplifts at renewal range from 5% to 10%, but rise to 20% in some cases.

Lynn Hilton, Cluttons partner for residential lettings, says: "As demand for property continues to outstrip supply at the lower end of the market, prospective tenants must ensure they can act fast when the right property becomes available, with holding deposit and references in place."