UK landlords can welcome in the new year with a "cautiously optimistic"outlook, according to one industry expert.

Tim Hyatt, head of UK lettings at Knight Frank, stated that he expects the rental market to continue to grow in 2009.

Despite statistics released by the firm showing that rents in prime central London have fallen by almost ten per cent over the last three months, he said the current financial climate would continue to drive demand.

"Renting has become an acceptable medium-term option for many people and its flexibility will continue to appeal as the economic downturn continues,"he claimed.

Mr Hyatt added that the fall in rents had been offset by plummeting capital values, meaning that rental yields are still high for landlords in central London.

As a result, investors can still enter the new year with cautious optimism in what will continue to be "a difficult market", he suggested.

This comes after residential agency Cluttons warned that landlords are likely to endure cheaper rental rates in 2009 as a result of rising unemployment and a greater number of homes becoming available for letting.ADNFCR-2002-ID-18946902-ADNFCR

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