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Evidence of demand returning to rental market

Evidence of demand returning to rental market

Category: Mortgages

Updated: 28/09/2009
First Published: 28/09/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

There is evidence that the rental sector is beginning to stabilise as oversupply is decreasing across the UK, while the number of new tenancies is increasing.

The Association of Residential Letting Agents (ARLA), which conducted the research, said it is the first time demand has returned to the rental market since the beginning of the economic downturn.

Some 83 per cent of the association's members agreed ten or more tenancies during the last quarter, compared to 79 per cent in the previous three month period. On average, each member signed up 36 new tenancies, compared with 32.6 in the previous quarter.

ARLA believes such results that show the historical decline in the number of tenants, which lead to a surplus of rental properties, is coming to an end.

It is a belief that seems to be growing amongst letting agents, as a third of members said they felt supply and demand of properties in the sector is in balance. Previously, just 19 per cent of those questioned shared the same opinion.

"This shift in balance of supply and demand is extremely significant for the private rented sector," said Ian Potter, operations manager of ARLA. "It gives further evidence to suggest that the property market as a whole is getting back on its feet."

The survey also found that the number of members who think there are more residential properties available than there are prospective tenants has fallen from over seven in ten (73 per cent) to four in ten.

Almost a quarter (24 per cent) now believe there are actually more tenants than properties. Just ten per cent believed this to be the case three months ago.

With the upturn very much in its infancy, the ARLA has called on the Government to throw its weight behind the sector to ensure a lasting and full recovery.

"As we have stated repeatedly, a healthy private rental sector is the only way in which the Government can hope to house future generations," Mr Potter commented.

"Accordingly, the Government must do all it can to nurture the recovery of the private rental sector, including the implementation of meaningful consumer protection measures."

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