Rents fell for the first time in five years between July and October as home-movers flooded the rental market with properties that they could not sell.

According to a new survey, 12 per cent more lettings agents said that rents had fallen rather than risen between August and October. That was a reversal from the previous three months, when nearly a third more agents said that rents were rising, figures from the Royal Institution of Chartered Surveyors (RICS) show.

It is the first time since 2003 that the gauge of rental yields has turned negative. James Scott-Lee, of RICS, said: “Many vendors have been forced to become amateur landlords, creating an inevitable downward pressure on rents.”

This came as a report said that more than one in three landlords would be plunged into negative equity by the middle of next year as house prices continue to fall.

Standard & Poor’s, the credit ratings agency, said that those who had entered the buy-to-let market in 2006 and 2007 were especially vulnerable, as lenders offered loans to those with smaller deposits, giving them less of a cushion against falling prices. It forecasts that between 220,000 and 440,000 buy-to-let loans, or between 20 per cent and 40 per cent of the market, would be in negative equity if house prices fall by 25 to 30 per cent from their peak last year, as many economists have forecast. House prices have already fallen by 15 per cent, figures from Halifax show.

About 12 per cent more agents say that rents will continue to fall rather than rise in the coming months, a record, RICS said.

Landlords in London were hit worst, with 53 per cent of agents saying that rents for houses fell rather than rose in the three months to October.