Those doubting the value of buy to let property would have been surprised to learn it is now worth more than commercial property.

New research conducted for the Association of Residential Lettings Agents (ARLA) found that the combined worth of all privately rented property in the UK is £500billion. This figure is higher than the total value of all the commercial offices, shops, factories, warehouses, hotels and leisure facilities in the country.

Despite some recent falls in the value of residential property, it seems those who have entered the rental market for investment purposes have reaped the rewards.

The report also predicted a bright future for buy to let, with rents set to rise by between ten and 15 per cent in 2008 and 2009.

According to the report, this trend was part of a stabilising effect the buy to let industry was having on the housing market. Over recent years, there were accusations that buy to let investors were snapping up homes that would otherwise go to first homebuyers. But the report suggests that the availability of more rental accommodation means young buyers won’t face a repeat of the negative equity situation of the early 1990s.

Ian Potter, ARLA head of operations, said: "It was a result of the appalling effects on young owner occupiers last time that ARLA took the initiative and launched buy to let to re-build and re-finance the private rented sector and to mitigate the dreadful social consequences of housing boom and bust. It has proved to be remarkably successful."

Figures from the report suggest that not only is buy to let proving valuable, it is providing an important service to those wanting a place of their own but are not keen to buy.