Rental supply dips and demand drops in March
The supply of rental stock fell by 4% in March, taking it to the lowest level since the start of 2015, according to figures published today by the Association of Residential Letting Agents (ARLA).
Its Private Rental Sector (PRS) report also noticed a fall in rental demand, with 33 prospective tenants registered per ARLA branch on average, down 11% from 37 in February, and below last March’s 36.
Supply has also fallen year on year. In March 2015, the average number of properties managed per branch was 192, which is down 12% this year with just 169 rental properties managed per branch – the lowest level since records began last January.
It’s a brighter picture in Scotland, where agents had on average a massive 273 properties on their books, and Yorkshire and Humberside, where 207 properties were recorded on average per branch. In London however, agents had just 122 properties on their books per branch.
The March survey also revealed that two thirds of ARLA agents predict that current and prospective landlords will walk away from the market following the April Stamp Duty changes, causing a decrease in the supply of rental properties and a subsequent rise in rents.
Rental supply has already fallen and rent costs rose in March for a third of tenants (32%). The majority (61%) of ARLA members fear they will increase further as a result of the tax changes.
David Cox managing director of the Association of Residential Letting Agents (ARLA), said: “We don’t expect falling supply to stop here – the recent Stamp Duty changes are very likely to cause supply to decrease even further, as landlords withdraw from the market.
“Not only do our agents predict that rent costs will increase further, but rental homes may also face a decline in quality over time, as landlords struggle to keep up with maintenance costs alongside the higher Stamp Duty charge.”