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Rental sector nearing capacity

Rental sector nearing capacity

Category: Mortgages

Updated: 17/10/2011
First Published: 17/10/2011

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 It is now over 6 months old so the content may be out of date.
Potential tenants are increasingly lining up to secure a rental property, but the sector could be running out of space.

New figures from the Association of Residential Letting Agents (ARLA) show that the number of agents reporting that there are more tenants than properties has reached its highest point since records began.

In fact, three quarters (74%) of agents think that demand is outstripping supply – a trend that has now been in evidence for four months in succession.

The increase is particularly evident in the south east and London.

It appears that with rental properties at such a premium that people are putting off moving.

The average amount of time that tenants stay in their rented homes has risen to an average of 19 months, as people are wary of trying to find a new property in such a competitive market.

The number of new tenancies signed up by agents has risen rapidly in a consistently upward trend since 2001.

But this figure has remained consistent at 34 new tenants every month per branch throughout 2011 after record numbers of new renters entered the market in 2010.

"The UK cannot rely on the rental sector to support the housing market in perpetuity," said Tim Hyatt, president of ARLA.

"The reality is that there is a finite amount of rental property and unless both housing supply and mortgage availability improves then renters will find that their options in the market are reduced.

"The Government is doing little to encourage landlords to invest in new properties therefore we are running out of quality stock to offer to tenants. This is reflected in rent increases and a lack of choice for consumers.

"Within such an intensely competitive market, we would advise tenants and landlords to seek the best possible advice from agents as there will be those that seek to exploit this situation."

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