The explosion in the number of people looking to rent has left landlords with a shortage of good quality properties.
Over the last three months, three quarters of letting agents have reported that they have more potential tenants than properties, figures from the Association of Letting Agents (ARLA) show.
The problem is even worse in central London, where more than eight in ten (82%) of letting agents say they have more would-be renters on their books than rental properties.
ARLA said that its members faced shortages right across the UK , as many people are choosing to turn to the rental sector because of its flexibility compared with the mortgage market.
Ian Potter, operations director at ARLA, said that the research highlights the dearth of properties in the private rented sector and that there are no signs of improvement.
It is a problem that has mushroomed in recent times; just two years ago, the number of letting agents reporting an undersupply of rental homes in the UK was 10%, falling to just 8% in central London.
"To work towards a solution, Government needs to look seriously at ways of incentivising investment into the private rental sector to increase the number of properties available for rent," commented Mr Potter.
"At the same time, it needs to look at ways of regulating what is becoming an increasingly popular housing option, so that consumers and landlords are protected from issues such as loss of rent monies and deposits as well as defaults on mortgage and rental payments."
Figures also revealed a slight increase in buying and selling activity among landlords - 16% of agents believe landlords are buying properties, up from just 9.3% a year ago.
Some 14% believe landlords are selling properties, compared with 25% a year ago.
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