The first quarter of the year saw an influx of higher value property into the Private Rented Sector (PRS), according to the latest research from the Association of Residential Letting Agents (ARLA).

Research for Q1 2011 shows an 11.6% increase in the average capital value of rental houses, from £401,400 to £447,900. Previously, this figure had declined following the last market peak at £442,600 in 2007.

ARLA says this growth was driven by London and the South East, with a 14.8% increase in average capital value in central London and 16.2% in the rest of the South East. The rest of the UK experienced a drop (5.2%). According to the trade body, this growth is due to an increase in family homes coming onto the rental market, which generally carry a higher value than smaller homes.

Ian Potter, operations manager of ARLA, said: “We believe that this increase in the overall average capital value of rental properties has been driven by different types of home being offered to let. Today’s housing climate and uncertainty around jobs and income means many people are choosing to let rather sell their home