Oxfordshire has become one of the hotspots of the country for people looking to rent a home.

A report by website Propertyfinder.com shows the county is now second only behind Surrey in terms of popularity in the lettings market.

Experts at the firm say Oxfordshire’s proximity to London is a key factor in the findings, which have been backed up by local lettings agents.

Robin Swailes, director of North Oxford Property Services in Jericho, said: “We have 500 properties in our portfolio and at the moment we do not have any available.

“It is normally slow at this time of year, but we are experiencing exceptional dem- and. The quality of life and schooling is better than in London but people can still commute into the City and we are seeing those 35 and over moving up here.”

Mr Swailes said the lettings market was being driven by the credit crunch, which has seen property prices falling in the county with people deciding to rent instead of buying a home.

And in Oxford itself, the supply of rented housing is at a premium because of planning restrictions and growing demand from the expansion of Oxford Brookes University and the hospitals.

As a result, rents are increasing by about three per cent this year after rising four per cent in 2007.

Frank Webster, of letting agents Finders Keepers, said all six of its offices across the county were very busy.

He said: “Oxfordshire has a lot to offer tenants, and our Abingdon and city centre offices are letting more than normal at this time of year.”

But he said there was still a decent supply of available property caused by people renting their homes when they found they had not been able to sell them.

He said investors were also looking to get back into the market because of uncertainty over the security of banks and low interest rates.

Simon Cudd, lettings manager at the Witney branch of Breckon & Breckon estate agents, said: “We have a cross-section of young professionals and families, some of whom have come from Europe and the United States and work in London, but don’t want to live in the City.”

Nicholas Leeming, director Propertyfinder.com, added: “Commuting is the perfect way to rent and save money for a deposit — and to make home purchase more affordable when they come to take the plunge.

“With everyone increasingly worried about finances, a growing number of people are going to be making the journey out of London and into the commuter belt.”