Buy-to-let landlords are battling for a shrinking pool of tenants following a 12% drop in the number of people living in rented property in the last eight months.
The number of homeowners has increased by the same amount since May 2013, according to a new study from Cover4LetProperty.
Government attempts to stimulate the housing market, such as the Funding for Lending Scheme and Help to Buy, have helped boost the number of people owning their own home.
The research showed that a growing number of 18 to 29 year olds are getting a foot on the property ladder.
Despite the fall in tenants, Richard Burgess, director at Cover4LetProperty, said there is still healthy demand for rental property.
“Our research shows that there is a level of recovery in the home ownership market with many more people now living in their own homes, and the number of people in rented accommodation decreasing.
"This could in part be as a result of the Help to Buy scheme.
"That said, it is not a time for landlords to feel downbeat, as there is still a buoyant rental market. It will be interesting to see the impact the new influx of potential tenants from Eastern Europe will have on the demand."
Roughly one in three Britons live in social or private rented property, while a similar proportion live with family or friends.
Those who earn £40,000 or more a year are just as likely to live in rented accommodation as those who earn less.
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