As yields in the private rental sector have continued to rise in recent months, the latest LSL Property Services Buy-to-Let Index suggests that this is something to do with rent prices hitting a record high in July.

According to the figures, the average monthly rent charge in England and Wales now stands at £725 per month - the highest ever point since records began.

And as demand continues to outstrip supply, David Newnes, director of LSL Property Services, explains that much of this is to do with the challenges facing first-time buyers who are choosing to turn to the private rental sector to solve their housing issues.

"As lending to those without substantial deposits remains depressed, demand for rented accommodation can only go one way in the long-term - providing further upwards momentum for rent," he said.

With increasing numbers of Brits looking to private landlords for accommodation, the competition for tenancies appears to be having an impact on rent prices - but this is also posing a problem for investors when it comes to arrears.

Indeed, 9.3 per cent of all rent was either late or unpaid in July - an increase from 9.2 per cent in the preceding month - meaning that landlords may have to make a greater effort in terms of striking a balance between maximising yields and setting reasonable rent prices.

"With the economy still in recession, and rents climbing to a new record high, the minority of tenants experiencing difficulty in meeting the monthly rent cheque on time is steadily climbing," Mr Newnes added.

So while they focus on keeping their properties as profitable as possible, investors will be taking steps to ensure that their landlord insurance policies are up-to-date and provide sufficient cover to guard against unexpected costs which can, in some cases, result in damaging losses.