Home ownership in England and Wales has fallen by six per cent in the last decade, with the 2011 census revealing that renting has increased as a result.

According to the figures, the decline in the number of people who own their home with a mortgage or loan directly corresponds with the six per cent rise in the amount of Brits who are renting from a private landlord or letting agency.

And with investors continuing to benefit from the consistently high demand for accommodation in the private rented sector as the problem with undersupply persists, it seems that 2013 will be another bumper year for landlords.

As Upad CEO James Davis says, investors are set to be in a position where they can be ever-more selective when it comes to deciding on prospective tenants, meaning they will be able to increase their chances of letting to people who will keep up with their payments.

"I suspect that 2013 will be the year when landlords seek quality rather than quantity when it comes to choosing tenants," he said.

"Those who will look after their property, pay the rent on time and in full and be responsible renters are sure to be preferred by landlords and I foresee full tenant referencing and rent guarantee agreements becoming the norm in 2013."

However, while being more vigorous with reference checks and taking a tough stance on potential tenants with a poor background of staying up-to-date with their rental payments will benefit investors, they will also have to take other precautions to safeguard their financial position.

From landlord insurance policies to properly maintaining properties, there is a wide variety of factors that investors have to take into account as they take steps to protect their finances and budget appropriately, so it's important that these aren't overlooked despite the strong performance of the private rented sector.