By Charlotte Beugge

After months of rising demand for rental property - and as a result, landlords being able to command higher rents - there are signs that the private rental sector might be experiencing a downturn.

According to research from the Association of Residential Letting Agents (ARLA), in the final quarter of 2011 55% of its members said they had more tenants on their books than properties to house them in.

While that might suggest that all remains rosy for the rental sector, it is a sharp fall from the third quarter of 2011 when 74% of ARLA members said they had more tenants than properties.

Even though the number of people signing up to a new tenancy was the same as in the third quarter - averaging 34% per agency branch - there was a big drop in London where the average was 26 tenancies during October - December, compared with 31 in the preceding three months.

And there was an increase in the number of agents saying tenants couldn't afford their rent - up from 36.7% in the third quarter to 39.2%.

Tim Hyatt, president of ARLA, says that the drop in demand could be down to the traditional pre-Christmas lull or that more people were buying rather than renting.

"We are reassured by the fact that the number of new tenancies is stable, but we will be watching the market closely in the coming months to determine how significant these latest figures will prove to be," he adds.

A separate report from charity Shelter found that 22% of Britons have spent less on gas and electricity to help pay their rent or mortgage in the last year and 34% have cut back on food spending.