Duncan Young, managing director of Newcastle and Northumberland estate agency Sanderson Young, said that rental prices were high because job insecurity meant that many people are afraid to commit to a mortgage.

“Historically we have relied more significantly on public sector employment and we have seen a lot of fears on that side, therefore there must be a greater number of people who don’t have the security to buy and are pushed into the rental market,” he said.

He added that he had never seen so few rental properties available in 28 years in the job, pushing prices up further.

“The cost differential is considerable because we’ve got such shortages of good stock,” he said.

“My colleague only last month moved in and is paying £1,200 rent a month for a house that would be £750 on a mortgage.”

He said that savvy customers were already realising that it was cheaper to buy. The number of people looking to buy leapt by a fifth in the first few weeks of January compared to the same time last year.

Shona Alexander, chief executive of the Newcastle Citizens Advice Bureau, said that high rental prices and changes to housing benefit could be a “double whammy” for low income families in the region.

She added that many families were still too worried to commit to buying a property.

“You could say ‘why bother renting a property when you’re paying someone else’s mortgage?’” she said.

“But people do appreciate that things can change and they may not be working overtime, they may fall ill or their job may disappear altogether.

“We want to make sure if people are thinking of taking on a mortgage, they really concentrate on the small print and understand the implications.”