Renters face a fight for properties as supply dries up
More than a third of landlords reported more would-be renters than available properties as the supply of residential properties on the private rental market decreases.
According to the latest survey by the Association of Residential Letting Agents (ARLA) 68 per cent of landlords have more potential tenants than properties, the third and biggest successive quarterly increase in a row. Just 46 per cent of landlords said the same this time last year.
The supply of residential properties on the private rental market decreased last quarter, with ARLA members reporting a six per cent drop in the number of manged properties on their books, from 143 to 135 per member agency.
At the same time the number of people investing in buy-to-let properties shrank by eight per cent as the number selling increased by five per cent. As a result the relationship between buying and selling buy-to-let property has reversed for the first time in four years.
David Cox, managing director at ARLA, said: “This quarter we have seen demand for properties in the rental sector significantly rise while the supply of residential properties has dropped. This activity has bucked the seasonal trend recorded over the past 11 years for this quarter, in which we normally see an increase in the number of new tenancies signed up. However, with landlords not investing in new buy-to-let, property tenants are finding it increasingly difficult to secure contracts.”
While rental properties have been hard to come by, the number of tenants doing due diligence on their future landlords has increased. Nine per cent of new tenants requested references on landlords from lenders, up two per cent from last quarter.
Cox added: “It’s great to see an increase in consumers making an active play to check that their landlords are financially viable. Renting a property and laying out considerable finances is a big commitment, and it is important that consumers ensure they are protected.”