Rental demand outpaces accommodation availability

Rental demand outpaces accommodation availability

Demand for rental accommodation jumped by 31 per cent between December 2016 and January 2017, while the number of available rental properties climbed by just 3 per cent, new figures show. 

According to the latest Private Rented Sector report from the Association of Residential Letting Agents (Arla) Propertymark, a “seasonal lull” was to blame for the disparity between renters and accommodation in December and January, although the report added both demand and supply had risen substantially over the previous 12 months.

Between January 2016 and January 2017, the prospective number of tenants rose by 10 per cent, with an average of 34 prospective renters registered at each Arla-approved letting agent, up from 31 in January 2016.

Meanwhile, the number of available rental properties increased by 12 per cent over the same period, with an average of 193 per branch in January 2017, up from 173 the previous year.

“As expected, the New Year brought with it a flurry of activity in the rental market,” said David Cox, chief executive of Arla Propertymark.

“While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin.

“When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants and rent prices will just continue to rise.”

The Arla report found almost a quarter of letting agents witnessed rent hikes in January, but this was down from 30 per cent in January 2016.

But Mr Cox warned proposed government plans to introduce a ban on letting agent fees could make the situation much worse for tenants.

“The costs of the vital services letting agent fees cover will need to be recouped, and this will get passed on to renters in inflated rental prices,” he said.

“This, combined with new landlords’ tax, particularly the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium.”